The dreaded B word! Budget. There eventually comes a realization that your finances are out of control, and you need a budget. There is hope, however, as a budget does not have to be a complicated thing that requires math equations or a degree in accounting.

The simplest first step is to start keeping track of what you spend. A plain notebook or graph paper will suffice. But be honest with yourself and put down every dime no matter how insignificant it seems.

After you have gotten in the habit of writing down all of your spending, you can start putting your spending into categories. Start with the essentials such as housing, utilities, car payment, insurance. Try not to create too many categories that are lumped together. It is easier to narrow down the pitfalls when the budget is more specific. This tactic will also help guide you on a realistic number for when you put spending limits on each category.

If you are one of the lucky ones that does not need to cut back, but you just need to know where it is all going, then you are ready to go. However, if you are like the majority of us who would like to start seeing a little more increase in your savings, then once you recognize where your money is going, you can start to see areas that could utilize more restraint. Start with the non-essentials like entertainment and eating out. Do you need all of those cable channels? Can you switch to a lower plan or even a new company that has a better deal? Can you cut back on eating out by one night a week or can you bring your lunch to work instead?

Any changes that you make that creates a surplus of money can be used to pay down any debt that you may have. Instead of paying the minimum balance you can add the extra to the lowest bill. Once that bill is paid off you can use the additional funds and now the minimum payment you were paying towards the next bill.

While you are whittling down your debt, you can start putting reasonable limits on your categories. After keeping track of your spending for a few months, you will know about how much you should be spending on groceries, fuel, clothing and will adjust your spending accordingly.

If you get comfortable with the simple budget and are ready to move to the next step, there are a lot of programs you can use. A few of the highly recommended choices are Quicken, Mint, You Need a Budget, or Mvelopes. There are many others out there, just make sure you do your homework and maybe even ask friends what they use.

Enjoy being financially stable! (More tips to come)