The main reason for having a budget is to help you see where your money is going, and where you can cut corners comfortably. Learn how to set up a budget that works for you, not against you.

The first thing you need to do is to write down every penny you spend . A small notebook that you carry in your wallet or purse is ideal for this. Don't forget to include the coffee you stop for every morning, or that soda you have in the afternoon at work.

After a month, list all of your expenses in groups. Your groups can be work related, meals, utility bills, insurance, home, car, or any other groupings that make sense to you.

After you have listed all your expenses, and grouped them, total it all. Look at your list, and double check that you haven't forgotten to list expenses that you don't have on a monthly basis, such as school clothes or tax payments.

Now list your income, your paycheck, and if you do side work and get paid for it. Anything that brings money in on a regular basis.

Compare the income and the expenses . If the expenses are larger than the income, you are going to have to look at cutting corners . The easiest place to cut corners are on the discretionary expenses, for example the grocery bill, or the entertainment expenses. Your fixed expenses such as mortgage, or rent, car insurance, utility bills can be lessened a little, but for the most part will stay the same.

Small savings will add up. Have a packed lunched during office days. It's healthy and won't cost you much. Shopping for sale items will help cut your grocery bill. You can also limit your entertainment expenses, choose the balcony rather than the lodge.

You don't have to deprive yourself of everything that you enjoy, but cutting back a little will help.

Everyone's spending habits are different, and as long as you are living within your means you are doing fine.

Source: essortment.com