Figuring out how much money comes in each month is usually easy, but figuring out how much you spend may take more effort. We discuss below steps to track your spending on a monthly basis.

This includes, but is not limited to, your checkbook register, credit card statements, phone bills, utility bills (electricity, heat, water, internet, etc.) and receipts for gas, groceries and anything else you buy with cash, check or a debit card.

• Don’t forget about items that are billed less regularly, such as taxes or insurance
• If you don’t keep receipts for some of the items listed, you may have to wait a month or two while you collect the bills required
• Use a notebook to make sure you record every receipt or use a money management program on a computer

Expenses can be divided into three categories: fixed, variable and flexible.

When you know what expenses are necessities (such as heat and electricity), compared with what expenses are for wants (such as eating at a restaurant), you will be able to make budget adjustments – as necessary – to help save for the car or home of your dreams.

Almost every financial advisor recommends paying yourself first when creating a budget. Paying yourself first means that you treat yourself as you would any other creditor that must be paid each month. Often, making savings your last priority means that you don’t save as much as you planned at the beginning of the month. To prevent this from happening:

• Decide on an amount – say 5 percent or 10 percent – of your take-home pay that you are able to save each pay period
• Deposit the money into a savings account when you pay other necessary expenses from that paycheck. If your employer has an automatic savings deduction program, all the better – it’s harder to spend what you can’t see.

By paying yourself first, you create an orderly way to make your money grow – and that can really pay off in the long run!