, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more tha

'Budget' is a four-letter word when it comes to your personal finances, but face it--if you don't decide ahead of time what's most important to you, it's easier than pie to slip into that nearly-impossible-to-break habit of living bigger than your paycheck. Use these tips to get started on creating a roadmap toward your financial success!

Before you can set a budget, or spending plan, that you can live with, you need to look at where you’re starting. Are you already ‘out in the real world’ living on your own, or are you still living at home or on campus? If you’re already living on your own, you have a headstart in the sense that you know what the costs for a variety of things are. On the other hand, if you realize that you’re already living in a way that will sabotage your financial future, it’s going to be rough getting things back on track. But it can be done.

Before you start developing your spending plan, you’ll need to track your current spending patterns. For an entire month—it’s a long time, but well worth it—carry a small notebook with you and record every penny you spend (yes, every penny!). Write down what you spent money on, how you paid for it (cash, credit card, check), and assign it to a category.

Each person’s spending categories will vary a bit, but include things like home (rent, electricity, water, renter’s insurance), auto (loan payment, gas, insurance, maintenance, personal property tax), food (for at home, plus another category for eating out), grocery items, clothing, entertainment (movies, magazine subscriptions), health (doctor bills or copays, prescriptions, insurance premiums, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more than

with, you need to look at where you’re starting. Are you already ‘out in the real world’ living on your own, or are you still living at home or on campus? If you’re already living on your own, you have a headstart in the sense that you know what the costs for a variety of things are. On the other hand, if you realize that you’re already living in a way that will sabotage your financial future, it’s going to be rough getting things back on track. But it can be done.

Before you start developing your spending plan, you’ll need to track your current spending patterns. For an entire month—it’s a long time, but well worth it—carry a small notebook with you and record every penny you spend (yes, every penny!). Write down what you spent money on, how you paid for it (cash, credit card, check), and assign it to a category.

Each person’s spending categories will vary a bit, but include things like home (rent, electricity, water, renter’s insurance), auto (loan payment, gas, insurance, maintenance, personal property tax), food (for at home, plus another category for eating out), grocery items, clothing, entertainment (movies, magazine subscriptions), health (doctor bills or copays, prescriptions, insurance premiums, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more tha

be rough getting things back on track. But it can be done.

Before you start developing your spending plan, you’ll need to track your current spending patterns. For an entire month—it’s a long time, but well worth it—carry a small notebook with you and record every penny you spend (yes, every penny!). Write down what you spent money on, how you paid for it (cash, credit card, check), and assign it to a category.

Each person’s spending categories will vary a bit, but include things like home (rent, electricity, water, renter’s insurance), auto (loan payment, gas, insurance, maintenance, personal property tax), food (for at home, plus another category for eating out), grocery items, clothing, entertainment (movies, magazine subscriptions), health (doctor bills or copays, prescriptions, insurance premiums, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more tha

ategory.

Each person’s spending categories will vary a bit, but include things like home (rent, electricity, water, renter’s insurance), auto (loan payment, gas, insurance, maintenance, personal property tax), food (for at home, plus another category for eating out), grocery items, clothing, entertainment (movies, magazine subscriptions), health (doctor bills or copays, prescriptions, insurance premiums, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more tha

, contact lens supplies), and miscellaneous (haircuts, impulse buys). If you’re not out on your own yet, you won’t have as many categories as someone who is, but it’s still an extremely valuable exercise.

At the end of the month, you will probably be astonished at what you spent your hard-earned money on. Most people are. Those ‘little’ purchases, usually made with spare change, add up to much more than you could ever have imagined. How many times did you stop at Starbucks? In my opinion, the two most dangerous words in finances are ‘just’ and ‘only.’ “It only cost two-fifty.” “It’s just four bucks.” Add a bunch of those together over the course of a month, or year, and they add up to a big bite out of your budget.

After you pick your jaw up off the floor, you’ll be ready to move on to the next step and begin developing a reasonable spending plan that will move you toward your financial goals.

You’re Ready—Develop Your Spending Plan

-- Get out some paper, or use a spreadsheet, and label three columns: Knowns, Needs, and Wants.

-- In the Knowns column, record all expenses you know you will be incurring and which have a set dollar amount each month, such as rent, car and student loan payments, insurance, basic phone charges (just the cost of having the line, not any long distance calls you might make), Internet access (like AOL or a DSL line), etc. Enter an amount equal to 10% of your takehome pay under Savings—this should not be an optional item, but a required one.

-- In the Needs column, record all the things you need but which don’t have predetermined dollar amounts: food, groceries, utilities, basic business wardrobe items, long distance phone calls, commuting expenses (gasoline and car maintenance, train fare, car pool fees), basic furniture and household items (remember: basic, not luxury), and so on.

-- Guess what each item might cost per month. If you’re not very accurate with your estimating, guess on the high side so you won’t end up with an unpleasant surprise after the v