The 5 biggest money mistakes you will make this year and how to fix them.

There’s a reason you keep making the same money mistakes, despite the best of intentions. Some of it has to do with a lack of awareness about how money actually works, and the rest is down to your “money personality”.

According to Money Harmony we are all either a Hoarder, Spender, Money Monk, Avoider, or Amasser?

Hoarder: You like to save money, set financial goals, do a budget and actually enjoy making up a budget and reviewing it.

Spender: You love spending money on yourself and others.

Money Monk: Money makes you feel guilty and you think it is the root of all evil.

Avoider: You tend to avoid looking too closely at your financial situation and have no idea how much you earn or where it is all going.

Amasser: You need large amounts of money to be happy and use it to spend, save and invest.

Think of it a bit like star signs with one of them signifying your main personality and maybe one or two more making an appearance depending on how hungry you are while grocery shopping or how good the sale is at your favourite clothing store.

I am a combination of a Spender and an Avoider however I am on a quest to become a Money Monk. Part of that quest is to keep learning as much as I can about how to manage money, which is why I stumbled across some brilliant advice which reminded me of past mistakes I’d made, which led me to epic financial failure in 2008/2009 from which my family is still attempting to recover.

Christmas is coming up so there’s never been a better time to perfect your budget. Article continues after this video.

Managing your money doesn’t have to be complicated. In fact it’s pretty basic. However if you have a money personality that leads you away from logical thought when it comes to money, you need to visit these next five points every pay day before even a dollar leaves your account.

This time it’s Dr. Phil holding our hands through our money management disasters, with timely reminders of common mistakes we all make.

1. Believing expenses are fixed

It can be so difficult to do a budget when so many of our important expenses aren’t fixed. When I think off the top of my head of the bills I have coming in that fluctuate they include mobile phone, Foxtel, electricity and water, just for starters. Dr. Phil says when it comes to budgeting you need to be ruthless. If you are struggling to paid your utilities, you might need to go without that fresh $30 salmon that forms part of your new healthy eating plan for a while.

“Everything but survival needs to be put aside until you can afford the expenses without going into debt.”.

What you can do to make these bills more predictable is to contact your providers and ask to go on a payment plan where they calculate the average amount of these bills and you make a weekly contribution towards them.

2. Using some of your super

In 2008 when we were facing losing our home due to severe financial distress I came up with the brilliant idea to release some of my superannuation in order to catch up the arrears. I remember how happy I felt at being the one who had come up with the solution, thrilled to alleviate some of my husband's stress. I remember coming across an article that stated majority of people who do this lose their home anyway.

In full denial, I went ahead and released half of my super, caught up on our mortgage payments and yes, we lost our home anyway, along with half of my hard-earned super.

Dr. Phil says only access your super in a "dire emergency". "Unless it’s an absolute dire emergency, you should never cash out your retirement fund. It may give you a short-term fix, but the day will come when you wish you had that money. Instead, find a way to make new money as a way to solve your cash flow needs."

3. Relying only on your fixed income

After tapping out my super the only option left for me was to get a weekend job to help make end's meet and I wish I had stumbled upon this solution earlier. It was a much better way to help our budget flow better instead of borrowing money or using my super.

It's a matter of putting on your thinking cap and figuring out a skill you have that will allow you to earn money outside of your main job, or even from home. Make sure you check with your main employer before you take on extra work. Most of them won't mind but some are pretty strict about such things and may even offer you a different way to make more money.

"Don’t think that just because you’re on a salary that that’s the end of your earning power," Dr. Phil says. "Consider getting entrepreneurial and creating a home-based business that can generate extra income for the household."

4. No back up plan/s

Most of us know we need to have some savings put away but did you know that the best way to manage your money is to have savings as well as a "rainy day" fund? One of those savings accounts can be accessed for unexpected expenses and bills. The other should be as difficult to access as possible. Knowing it is there should help you sleep better at night, regardless of your day-to-day expenses.

Dr. Phil says not being able to easily access it is key. "You can’t live and spend like you’re always going to be at the most money you’ve ever made. It’s important to establish a savings account that you do not access unless it’s an emergency."

5. Living beyond your means

Put your hands down. We all do this to some degree and I'm a firm believer in not only managing your money well - because you worked hard to earn it after all - but also allowing room in your budget for some fun. If you love your toast and latte each weekday morning, budget it in. If you can't do without your fortnightly spray tans, budget them in. But get rid of anything you don't really love or can do yourself at home.

And get rid of any ongoing expenses that you know deep down you really can't afford and is taking away from your ability to create a stable financial future for yourself.

"Put your ego aside and know you will sleep better at night when you have a roof over your head that you can afford," says Dr. Phil. "If you can’t afford what you have, like a house, car, or boat, then you must get rid of it. Get out from under it, and you’ll have peace of mind. It’s math, not magic!"