How to set a budget and stick to it, is a tool you need to help you stretch your paycheck as far as it will go. And all it takes is just a little bit of discipline, planning, and most importantly, prioritization.

Now, while creating a budget may seem overwhelming at first, the time you spend putting it together will undoubtedly be worth it when the process of paying your monthly bills becomes a little less stressful. So, where do you start?

Well, setting a goal is always an excellent place to begin. It gives you something to shoot for. And then, of course, making a plan that’s going to set you in motion. So here’s how you can budget your money in six easy steps.

1. Know What Your Income Is

Knowing how much you can spend each month starts with knowing how much you take home, and that means you can’t build your budget based on your salary. Instead, it should be base on your net income. So, get out some pay stubs and see what you’re clearing after taxes, insurance, 401k contributions and other things like that.

2. Know Your Basic Expenses

Determine your necessary expenses by figuring out what your fixed costs are every month. These are the things that don’t fluctuate or change dramatically throughout the year. For instance, rent or mortgage payments, reasonable old car payments, insurance, and student loans. It is also an excellent time to make sure you have some safety net to help you pay for these expenses in case of an emergency like if you need a new water heater or your car needs a new transmission and so on.

3. Know Your Dynamic Expenses

Determine expenses that vary each month. Most often than not, these are the things that change based on usage, like your phone, and other utilities, as well as your grocery bill, that could amend. You can also go ahead to adding up all those flexible expenses like clothes, restaurant, meals and entertainment costs. In essence, these are the costs that you have control over.

4. Know Your Priorities

You need to determine what’s essential when it comes to creating a budget that works. This, you have to take a fierce look at what you feel is truly necessary. As much as you’d like to think you can’t live without the latest gadget, this type of expense should go into the “like to have” category. So, if you want to find the fluff in your budget, start digging into your variable expenses and rank what’s most important to you. Do you need unlimited texting on your cell phone? If not get, rid of it. Or, are you watching all the 437 channels of cable? If no, then downgrade it to the basic package.

5. Keep Track of Your Spending

Follow your spending and review monthly, if you want to give your budget a fighting chance. And how can you do this? Keep an eye on your wallet and especially those credit cards to make sure you’re spending within limits throughout the month. Don’t forget, it very easy to forget your spending’s and even more comfortable for the small things to start adding up. But to avoid this, you need to keep track.

6. Pick A Track Recording Tool

keep track, and find a way that works for you to keep track of your Expenses. That can mean using the old pen and paper method, or a spreadsheet or even one of those new fancy fund budgeting apps. A lot of banks today do have these as part of their online banking. They are easy to find and use, so be sure to look for them. When you do so, balance your budget and keep your income information current, and track your actual expenses monthly. After a few months, you’ll start to see patterns; then you can figure out where you can streamline and make adjustments.

But, if you don’t want to do it all by yourself, there are some sites all over the internet to help you analyze what you have coming in and what you’re spending.

In a nutshell, making a budget is a process that will take some time and effort. However, put these steps into place and what you’ll get will be well worth it. Be for you know what’s going on, you’ll have more money at your disposal, for the things you want in addition to the things you need. As usual, if you have some additional suggestions, please don’t hesitate to drop it in the comment section below.

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