The first step in budgeting for the future is looking at the amount of cash coming in and the amount of cash paid out. This is known as a cash flow analysis.

Here are some things to consider:

Income Examples: Salary, unemployment income, interest, alimony, child support, etc. List your net income( after taxes) this is more of a true figure what you have to spend.

Cash Expense Examples: Reoccurring cash expenses, which vary little month to month, utility bills, child support expense, include rent, credit card payments, loan payments and insurance premiums.

Create categories such as housing, food, saving, debt, clothing, household operation, transportation, medical, entertainment and miscellaneous, to help you track cash expenses more easily.

• Begin by filling in how much you spend in fixed categories from your memory.

• Start to collect information from credit records, receipts and bank statements and checkbooks. Look over records for the previous month or two to establish basic spending totals under broad categories.

• To help you simplify or personalize your budget set up you own categories. This will help you to better relate and understand the process.

A budget is simply a financial tool, a guide for helping you manage your money. First and foremost, a household budget helps you see where your money goes and puts you in control of how it's spent.

Planning: Your budget helps assure that your total income meets total expenditures. In other words, your expenses do not need to be more than your income. It's a great way to save money and build for the future.

Communication: Your budget helps you communicate your personal goals and monetary plans to yourself and others.

Control: When you create a budget and keep track of expenses, you can see how you actually performed versus your plan. If the numbers don't match up, you can adjust the plan or your spending behavior.

TIPS TO CONTROLLING SPENDING:

• Carry cash in small increments, the less you have the more you save.

• Control credit card usage.

• Buy only what you need.

• Consider your needs vs. your wants.

• Do you eat out a lot?

• Can you cut back on daily expenses?

• Do you have expenses that you really don't need like cable or cell phone?

To help you on furthering budgeting your cash and understanding cash flow, you can download this FREE cash flow worksheet.  Click Here to download.