Budget Tracking

I'm a fan of knowing your budget.  Realistically knowing what goes out in a month.  Knowing those "odd ball" expenses that don't come up every month such as paying insurance premiums.  If you don't have a budget here's how to start.

1. Write down every penny that goes out of your pocket during the month.  Every.single.penny.  If you don't know what's going out and where it's going it's rather difficult to get a realistic budget.  Use a spreadsheet or just write it down on a piece of paper, whatever works for you.  It sounds fine and dandy to set a goal of $x for say groceries but if you actually spend $y and it is no where near $x then it isn't realistic.
2. Add up all of the "odd ball" expenses.  Divide that up over 24 pay periods (assuming you or someone in your household get's paid twice a month) and then take that out of your paycheck on payday.  If you do online banking you can do this automatically.  That way when that car insurance bill comes in your mailbox you won't be scrambling to pay the bill.  (I'm also a fan of doing automatic savings this way too.)
3. After you see where all your money is going over the course of two months you can see where you may need to make changes.  You may not have realized you were spending so much money on renting movies for example.  Spending a $1 here or there does add up.
4. Write your budget down.  Be realistic but set goals that you think you can reach.  You may have been spending $y on groceries but with some organization, coupon clipping, sale hunting, baking more from scratch, etc. you may be able to lower that amount spent.
5. Put that budgeted money in cash, in envelopes.  David Ramsey (Omma "brand" shout out) is a fan of this method.  We "feel it" more when we use cash.  It's more "personal."  And it is visual.  I've tried the method of writing down what was spent on our credit card to stay within that limit and it didn't work for me.  I always ended up spending more.  But when I have cash in hand I can see how much is there, how much is for each week, and how much I have left.