There’s nothing more we want than to be able to efficiently manage our money. After all, the money that we want to manage is money that is often times, hard earned. This is where a budget comes in. A budget executed properly, should help you see where your money is going, get more utility out of every buck, and help you save some extra for future use whether you plan to purchase a home or just maintain the home you already have.

The first smart secret to a budget is to set a goal. What do you want to achieve? Do you want to correctly appropriate your income into bills payments? Do you want to put an amount aside for a big purchase or a huge investment? By having a goal, you will be able to shape your budget to best serve your interests.

Secondly, take note of where your money usually goes including both large and small expenses. This includes bills, major but regular purchases (like grocery costs, health care costs, and the like), and everyday miscellaneous purchases. Only when you list down everywhere your money usually goes will you be able to identify which expenses you can do without. Once you’ve identified these regular expenditures, take into consideration what you can cut back on. How much do you spend on your daily coffee in the morning? How much do you spend on newspaper deliveries to your front door? The measly $2 or $5 of these small purchases cumulatively translates to more than $3600 a year! Instead of buying an expensive latte or reading the newspaper on print, put aside the amount you would usually pay for these small routine purchases in a small container. You will be surprised at how much you’re saving out of your older budget.

Being indebted in various ways is a vicious cycle on its own. Not only are you obligated to make continuous payments, but you are paying huge interest rates that are continually going up. The best way to deal with eliminating this is to pay the minimum on all of your debts in order to avoid paying extraneous late fees. Whatever cash excesses you may have, you can opt to add on to the payments you make for your biggest debt. This way, you are concentrating on getting rid of the biggest debts first that are costing you the greatest interest rates. Doing this progressively, you’ll be amazed at how much you will begin to remove from your higher debts.

The last and most important step is to jot down the amount you earn versus the sum you spend. You can make use any computer cash management programs, or make database spreadsheets of your own. Making a system that works for you will help you keep track of your monthly budgeting progress. It will also help you to save for a down payment if you are planning to purchase a home or for maintenance if you already own a home.