Right now, many of us are fighting to make it through the “I want it now” culture that tells us to spend today and worry about the consequences tomorrow. It’s just so easy to start living outside our means, hoping that eventually something will come through for us and help us get out from under a huge pile of debt that sometimes we get over our heads before we know what happened.

There is a way to start building a little financial independence, and it’s not a miracle investment or sudden financial windfall. It’s the simple process of creating a personal budget and sticking to it; no matter what. Budgeting may not be an exciting process, but a careful plan and some intelligent spending will save you more than just money – it will save all the stress, headaches, and problems that come with an ever-rising debt.

Identify Where the Money Is Going
The budgeting process begins by tracking all of your spending expenses for a month. Nothing is allowed to slip by for these thirty days. No matter how small the purchase, you must make a note of it. This includes your regular bills and monthly expenses, groceries, entertainment, and even just a quick bite to eat on the way home. While it may seem tedious, there’s plenty of ways to make is easy and convenient. Whether you carry a small notebook or make use of a convenient app on your phone, it only takes a quick moment to record your transaction where it can do some good at the end of the month.

Next, list your seasonal, annual, and semi-annual expenses that you incur, but didn’t pay while you were tracking your spending. This could include things like taxes, vehicle maintenance, and insurance payments. You can estimate the totals and divide it by twelve to come up with your monthly expenses to include in your financial plan.

Total Your Income
Once you know exactly what you’re spending each month, it’s time to take a look at how much you are really bringing home. Add up all of your income, but only work with the numbers you are actually taking home. The gross pay is not applicable in this situation. Include the income from all your sources – your job, freelance income, investment dividends, alimony, and more. You should not, however, include money you “expect” to receive, whether it’s from a bonus, a tax return, or your friend’s cousin’s brother who owes you some money and claims to be “good for it.” If you’re pay is not consistent, take the average from the last ten pay periods.
If your total expenditures are more than your total income, it’s time to make some changes.

Set your Savings Goals
Once you have the big picture in front of you, it’s time to start changing your habits so you can begin to save money rather than spend it. Take your list of monthly expenses and put each transaction into a different category. This is the tough part. You need to be able to decide which items are necessities and which are not. It may not be enjoyable to admit your favorite things aren’t necessities, but it is critically important in reaching your savings goals.

Decide up-front how soon you want to get out of debt, and how much you want to save every month. Goals are important, and they can help guide you toward financial independence. Whether you are just deciding to track your transactions a little more closely or reallocate your current spending to increase your savings, goals can provide the sense of accomplishment you need to stick to the budget.

Let’s not forget something important; we make money to spend it, right? And after the necessities like house payments and groceries are taken care of, our spending thoughts turn to items that make us happy (as they should). Don’t view this budgeting exercise as a means to cut off your “happiness spending.” Instead, use this as a way to figure out which of your expenses matter to you most. If your frequent trips to the coffee shop mean a lot to you personally (despite it being a bit costly), figure out how to keep that in your budget. After that, eliminate other expenses that don’t mean as much to you. If you hardly watch TV anymore, and rely primarily on other entertainment outlets like Netflix, consider severing ties with your cable or satellite bill as a way to cut unnecessary costs.

Take Money Management Seriously
A lot of people seem to be under the impression that if they ignore their money problems they will just go away. Or worse, they are sure that a sudden financial miracle will come and bail them out. The simple fact is that you don’t need a sudden miracle. You can take a proactive approach and reach your financial goals on your own.
The principles of balancing your checkbook still apply to modern money management. Don’t assume that the bank has everything right, or that you have recorded all your expenditures without fail. Whether you are using your cheap personal checks or a debit card to make a purchase, keep track of your expenditures and compare them to the bank’s records. Then you will be in a much better position to create the kind of budget that really works for you.

Author Bio:
Bo Manry has been involved with finances for most of his professional career.  He writes to help others who might struggle with saving money during these tough financial times.  Bo has worked a lot in the checks industry and believes strongly in the importance of balancing a checkbook.  To read more of his posts go to www.checks-superstore.com/blog/