As a working individual in the American workforce you probably feel that you work hard for your well deserved paycheck. Maybe you pull the 9 to 5 grind, teach or clean houses. Regardless of your occupation, your financial and economic stability is important to your general sense of wellbeing. It is not about wealth and extravagance. Economic stability leads to a sense of security and more personal financial freedom. So what can you do to make your paycheck go the extra mile? One way is to make a budget. So unplug your ears and uncover your eyes because planning a budget is not as excruciating as you may think.

The Starting Point: Analyzing Your Spending

MS Money offers many different ways to begin your budget. The organization, however, advises individuals to begin by evaluating their spending. MS Money says that you should track the money that you spend for several weeks. They are not talking just about major bills and purchases. Every dime, nickel and penny should be spelled out in the list that you are making.

MS Money urges individuals who are making their budgets to go beyond recording cash withdrawals. Take it to another level and actually detail what you spent the cash on. And don’t forget to keep and organize your receipts! With so much being purchased with plastic these days, it’s hard to keep track of spending unless you have ink and paper to remind you.

When you have done all of this, total up all of the spending that you have done over the past several weeks as well as all of your income over the past couple of weeks. Then, move on to step two: creating the budget.

The Next Step: The Budget

MS Money goes on to suggest several specific steps involved in creating the budget. Begin with two columns: an expense column and an income column. The first is listing all of your monthly income. This is your pre-taxed income that comes from salary as well as investments. Then, you need to add up your expenses. MS Money offers categories into which you may want to consider separating your expenses. These include combined taxes, housing, home care, food, auto, insurance, education, and personal care.

Then, add up the dollar amount on each side. If you have money left over at the end of the month, then you are experiencing what MS Money describes as positive cash flow. This is a good thing! If you don’t have any money left over, or, if your expenses are more than your total income, you have a negative cash flow. Consider cutting back on variable spending, which is the spending in your budget that varies. This could just mean cutting back on your dining out or cutting back your cable channels.

Whether you are in the positive or negative ends of the spectrum, creating a budget will help you better assess where you are and help you plan where you are going.