Some general principles of managing money

Here are some good ways to get your finances under control:

- Determine your spendable monthly income.

- If you have additional sources of income (i.e. interest income, alimony, child support), include them also, calculating the monthly income using the above chart.

- Find out what you spend

- Write down everything you buy and exactly how much it costs (tax included) for at least one month. This will allow you to see where your money really goes. Keeping up with this may require a little discipline and hard work, but the results will be well worth it. This is an especially important step for getting your finances under control. Many people do not know how much they really spend and what types of things they spend their money on.

- Use the two-list system to make a budget

Create two columns. In the left column, list your monthly income. In the right column, list your monthly expenses. If your expenses total more than your income, see "Learn to Economize" below.

While it is not possible to plan for every expense, your expense budget should include all of the areas on which you spend money, not just the major ones like food, rent and insurance. Don't try to leave categories out and 'borrow' the money from these hidden areas of your budget. Be honest. If you know that you spend $20 a month on tanning or videos, include it in your budget. For periodic expenses, such as car insurance, figure out how much you need to put in your savings account each month so that the money will be available when it is due, and build this into your budget.

Learn to economize.
Should you find out that your spending exceeds your income, here are a few tips on how to reduce your expenses:

- Comparison shop for the cheapest prices on the things you need to buy.
- Consider buying generic or 'off' brands instead of name brands.
- Shop at garage sales or thrift stores for household items and clothing. You can save a lot of money this way.
- Don't buy on impulse. Stay out of shops that sell only expensive items--like electronics stores.
- Cook your own meals instead of eating out. Cook from scratch--packaged or prepared meals are usually more expensive.
- Always turn off lights and electrical equipment when they're not in use and keep your thermostat set low in the winter (60 when you're not there and at night and 68 when you are home) and high in the summer. Better yet, turn your air conditioner off and just use a fan in the summer.
- Try using public transportation instead of your car, and don't make long trips if you don't have to.
- Use credit cards only when necessary (such as ordering merchandise via the web). Immediately write a check to the credit card company for the amount you spent and hold it until the bill comes, paying the balance off every month. While they can be useful in some situations, credit cards can get you into some serious debt in a hurry.