If you do not have a written, monthly budget you may not even know where all of your money is going. In fact, you would be surprised how many people do not take the time to work out a family budget. If you are working long hours and still have no many left at the end of each month, it may be time to work out a budget. It is very simple to do.

If you do not track where your money is going, you will never be able to slow your losses. Before you can gain control of your finances, you need to know where your money is going. Everyone has months where more money goes out than comes in. This is normal. However, it is a problem when this occurs over and over. If you find this happening, take it as a sign to start planning your budget.

The first step is to list all your income sources, including your salaries (you and spouse), any interest or dividends you earn on your investments and bank accounts, and any other additional monthly income. Next list every recurring monthly bill including electric, water, telephone, cell phone, Internet, television, gas, rent or mortgage, car payments, etc. Then page through your checkbook and make a list of all the checks you wrote in the last month. You also need to review your credit card statements and those from your bank if you use a debit card. At the end of a month, list all charges you made that month on each credit card and any charges you made on your debit card. It is essential to have a list of every expense that you incur. You do not want to miss anything, no matter how trivial.

You should do this exercise for several months or at least until you get a good grasp of your spending habits. Many people have a general understanding of their monthly living expenses, but you may be very surprised to learn how much you spend on less necessary items. Rent and electricity are required. But do you really need to order pizza three nights a week or rent all those movies. Maybe you can drink water instead of soda or refrain for ordering an appetizer when you go out to eat. Maybe you can cook more to save money. Tracking this spending in detail will allows you to see where your money is actually being spent on a monthly basis.

Unfortunately, not many consumers take the time to plan a budget. Furthermore, if they do, they probably do not maintain it for very long. It takes discipline to accomplish. After a few months, you may be surprised to learn you have saved enough money for an extra vacation, car payment, or even a down payment on that new home.

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