One of the most painful but essential financial skills is personal budget planning. Trying to plan your finances without a budget is like walking in the forest blindly and hoping you get out on the other end.

Here are teh main 3 steps involved in budgeting your money in a proper way:

• Calculate all your earning income (salary and any other income you are currently getting). For example if you are working in a restaurant as a waiter/waitress, calculate all the tips you are getting as well. If you are divorced and you are getting child support, add that in too.
• Identify your expenses. Take into account all your personal expenses, your housing expenses, everything that goes out in terms of money, add it in.
• Now compare your earning with your expenses. If you have more income, all is good. But on the other hand, if your expenses outweight your income, you have a problem that you need to address.

Sadly there are very few people who do that in their personal lives. We all think that budgeting, financing is only for corporations and the accountants at our day job. But once you learn to budget your own personal finances, with time you will start to see a pattern, and should the pattern be on the downslope, you will be able to bring it back up. But if you are not budgeting, how will you know when is it  time to tighten the wallet a bit more?