Help for Creating a Monthly Budget

Track Your Spending

Keep a journal for one month of everything you spend your money on, including groceries, coffee, gas, monthly bills and stamps. At the end of the month, divide your expenses up into categories such as food, transportation and bills, then add them up. According to financial adviser Suze Orman, "You know the big-ticket expenses in your life, but all the smaller spending can also be a killer. Take a look at your monthly outflow, and I guarantee you will have a few 'Yikes, I had no idea' moments." Tracking your spending gives you a visual map of exactly where your money is going.

Determine what areas you're putting too much money into and try cutting back for a couple of weeks to see if you can live within your new budget. For example, if you decide to get a gourmet coffee three days a week rather than every day, do a test run for two weeks. If you find that making your own coffee on the other mornings is too stressful, find another area where you can cut back. Eating out, entertainment and gadgets are all things that can easily cost hundreds of dollars per month.

Your money should be spent on things that you need first, and those things should take priority in your budget. Oftentimes, people think they're spending money on needs, but they can spend much less by being smarter about how to fulfill those needs. Eating out is an excellent example. In an article by Real Simple, "Your Biggest Money Worries, Solved," Elizabeth Fenner suggests packing snacks instead of buying them.

Put your savings into an account that will reward you. The financial planning blog The Simple Dollar recommends using a checking account where you can earn 3 percent interest and are never charged fees. Put away at least 10 percent of each paycheck and you will start to see your savings build up. Additionally, you can save on bills by using less electricity, turning the heat down a couple of degrees, using public transportation and watching your cell phone limits. Those savings will leave more cash in your pocket, or in your savings account.

If it seems as though you're sinking money into your debt each month without seeing any results, you may need to rethink your strategy. Financial adviser Dave Ramsey suggests getting out of debt with "the debt snowball plan." According to this plan, people usually begin paying the debts with the highest interest first; however, doing so involves being patient before you see any dent in the debt. "What I have learned is that personal finance is 20 percent head knowledge and 80 percent behavior," says Ramsey. "You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction." Create a plan that works with your goals and thought processes.