Budgeting is a very essential process that will enable you to better manage your spending and control your debts.

The first step towards taking control of your financial situation is to do a realistic assessment of how much money you earn and the amount of money you spend by using our budget worksheet.

• Start by making a list of your income from all sources.
• Then, list your "fixed" expenses each month such as your mortgage payments or your rent, car payments, or insurance premiums.
• Next, list the expenses that vary, such as entertainment, recreation, or clothing. Writing down all your expenses, including those that seem insignificant, is a helpful way to track your spending patterns, identify the expenses that are necessary, and prioritize the rest.
• If you don’t know how much you spend on the variable expenses (most people don’t have a good handle on this) keep track of everything you spend for two months.
• Once you have identified all your fixed expenses and your monthly variable expenses, compare these expenses with your income. Now you can start to make decisions about how much money you want to spend on the variable items.
• If you have extra money over and above your fixed and variable expenses, you should be paying off your debts with the highest interest rates first. Any extra money you have after taking care of your debts can go into savings or a fund for a special expense.
• If you don’t have enough income to cover all of your expenses, you can use your budget info to make decisions about where to cut spending so you can live within your budget.
• The goal is to make sure you can make the basic ends meet: housing, food, health care, insurance, and education.

For budgeting your finances you can also get help from the nearest library. Your public library has information about budgeting and money management techniques. Low cost budget counseling services that can help you analyze your income and expenses and develop a budget and spending plan also is available in most communities. Check your Yellow Pages or contact your local bank or consumer protection office for information about them. In addition, many universities, military bases, credit unions, and housing authorities operate nonprofit financial counseling programs.