Are you overwhelmed by bills? Do you feel like you’re living paycheck to paycheck? Are you sick of not being able to save for the future?

You may need a budget.

Okay, take a deep breath. Budgeting is a lot of work, but it’s a lot less scary than letting your money control your life. If you can take responsibility for your spending, you will own your money instead of it owning you.

But how do you start a budget?

Well, you start a little bit at a time. (Remember that saying? “How do you eat an elephant? One bite at a time.” Same thing applies here: Baby steps.)

You can’t start a budget without knowing your current spending patterns. You will need to get a notebook (or use computer software if you’re into that), and write down every single penny you spend for the next month, preferably three months.

This is probably the best exercise anyone can do when it comes to your money. It will allow you to see where your money is going. I use these free downloadable budget worksheets to record my info.

Don’t think you can “forget” to record things and get away with it. If you’re buying lottery tickets or a cup of coffee every day, you need to record it. You’re only going to be cheating yourself if you don’t admit to your spending habits, so be honest.

Be sure to include those larger monthly bills for utilities, phone, cable, internet, etc. Don’t forget those bigger bills that you pay periodically throughout the year such as car and life insurance, property taxes, donations and subscriptions. I find that it’s easiest to figure out the annual cost and divide that number by 12 to figure out the monthly cost of those bigger, infrequent bills. And by all means, don’t forget about your debts: credit cards, student loans, mortgage, car payment. It all counts.

Tracking all of our expenses is something I still do every month. It’s very easy to get lazy about your money, and by tracking those expenses, we’re able to stop leaks in our budget before they become big problems. It’s a lot easier to tweak your budget each month with this method, then to go several months and find out you’re draining your savings like a holey bucket.

Once you’ve tracked those expenses, you can set your budget, learn to find the guts to change.