It seems like everyone is wiling to provide you with budgeting advice. Everyone from dear old dad to old Uncle Morty has something to say about how you spend your money. You may think you know where your money is coming from and where it is going, but if you do not have a written, monthly budget you cannot know for sure.
If you don't keep careful track of where you money is going, you will never be able to stem the tide of red ink. It's that simple. Before you can get control of your finances, you need to know where the money is going. Everyone has months where more money goes out than comes in, but if you are running a deficit month after month, you need to get control of the spending. Unlike the government, you don't have a printing press in the basement where you can just crank out more cash whenever you need it. If you do have a printing press in your basement, we need to talk, but that's another story for another day.
Starting a budget can be a time consuming and painful process, but it is absolutely vital to your financial well being.
Sit down and write out a detailed list of all your sources of income
Next write out a list of every recurring monthly bill
It is vital to have a list of every expense you incur so you can see what can be trimmed. Do this for at least a couple of months until you get a good idea of your spending patterns.
You probably already have a good idea what your monthly living expenses are, but you may be surprised at how much is sneaking out the door on things that seem frivolous after some time has passed.
It is these type of things you need to track in order to work up a realistic budget.Too few people take the time to work up a budget and stick to it. Once you have a budget program in place, it will be much easier to match your income to your outgo and to live within your means. Who knows, after a few months of fiscal discpline, you may even have some extra money to put toward your retirement or your child's college tuition.