A budget is a plan, a blueprint for your money. It tells you how much money you are earning, how much money you are spending, and how much you are saving.

Budgeting is one of the most effective tools for anyone, especially for people just starting their financial journey. It will guide you to understanding how to effectively spend your money. By budgeting the correct way, anyone could achieve financial freedom and live the way they've always wanted.

Income is any money you receive. For example, if you earned $20 painting your neighbor's fence, that $20 you earned is considered income. Expenses, on the other hand, is the money you spend. If you spend $5 dollars at a deli for a bag of chips and a soda, that $5 is your expense. Understanding your income and expense is vital for budgeting, as it allows you to see money you earn and spend.

The 50/30/20 rule is an effective budgeting technique that anyone could use. The 50 in the 50/30/20 rule is for needs, such as food, water, and bills. You should spend around 50% of your income on needs. If you earned $20 dollars, it is recommended you spend 50%, which is $10, on you're needs. The 30 represents the 30% you spend on wants (snacks, games, etc.). From the example from earlier, you would spend 30%, which is $6, on wants. The 20 represents the 20% that you save or invest. If you earn $20, you should save $4.  Of course, these variables could change. If you're a heavy investor, you might spend 30% on savings and investing, instead of wants.

Setting unrealistic goals: This destroys motivation and makes you not stick to your plan. Make sure to keep things simple
Not tracking your expenses: That $3 coke you buy everyday after school can slowly drain your bank account.
Not saving: Not saving seriously could lead you vulnerable to unexpected events. If your water pipes explode and you have no money, you're cooked.