The basis of an adequate budget is your net income. If your expenses are already more significant than your savings, you have two options. Make more money or spend less. It's generally easier to reduce the costs than to make more money.
Review your budget and determine what can be reduced. Are you going out to dinner less? Fewer new clothes? If you save more than you spend, that's great. Are you happy with the amount you're keeping? If not, what else can be eliminated? Once you know how much money you've been spending and what you've been spending it on, you can start setting financial goals. Be realistic about how much you can spend on debt, savings, investments, or all three.
Write down everything you spend for a month. Sure, it's going to feel like a pain. But keep a notebook with you, create as many categories as you need for your different expenses, and write them all down, from the coins in the parking meter to the rent or mortgage payments. Like most people, you'll be surprised by the difference between what you think you're spending and what you're spending.
Maybe it's the daily lunches or the lattes, but now you know where the money goes. Keep track of your spending for a month without changing your usual shopping habits. Then, at the month's end, look at where your money went. How can you keep track of your spending? Based on the spending habits you discussed in Step 3, you should be able to identify some areas where you can adopt a more frugal attitude to focus on the financial goals we planned earlier.
If you're trying to pay your bills or save for the vacation of your dreams, a budget is the first step to realizing your financial goals. One of the most critical steps in budgeting your money is learning to adopt a frugal life to achieve your financial goals without feeling limited.