Budgeting -- ooh, what a scary word! If you want to frighten someone whose finances are out of control, suggest that they tally up their expenses on a piece of paper. We all understand the value of such an exercise, but when it comes to the practicality of putting a budget together, we get cold feet. Budgeting doesn't have to be so painful, when you have a systematic series of steps to follow.
Visit Part 1 if you have not yet read it.
CREATE THE SHEET
Start with either a sheet of legal paper -- or a spreadsheet program -- and create 12 columns. Label the top of each column with a month of the year, from January to December (duh!) Each row on your sheet will represent a different living expense -- groceries, gasoline, Starbucks coffee in the morning on the way to work. You'll have better luck remembering everything that you spend money on if you think according to categories. "Automobile" would include gas, repairs, insurance, and taxes -- while "grooming" might be divided into clothes, makeup, haircuts, and facials.