Tracking Expenses

• To keep track of how much money you have, you must keep track of how much you spend. This includes careful monitoring of all expenses, including necessary and unnecessary spending. When you keep track of your expenses, categorize them so that you can see what percentage of your income is going to different aspects of your lifestyle. For example, a simple cost such as eating out can add up when you do it several times per week or even several times per month -- if you monitor the percentage of your income that goes toward these costs, you can cut them when need be.
  
  

Identifying Trends

• When your budget is in place, you need to balance it. This comes down to identifying your expenses and how they can be reduced. If you are trying to cut costs or build savings, you can start by axing unnecessary expenses, such as buying coffee every day and getting a regular manicure. You can also reevaluate the money you budget for expenses such as utilities -- if your monthly phone bills seem high, for example, you can balance your budget by switching to another phone service provider or negotiating with your current provider for better rates.
  
  

Regular Adjustment

• Unless you're lucky, your budget and income never stay exactly the same from month to month. Expenses and income vary, and as they do your budget must adjust so that you stay informed. Updating your budget on a monthly or even a quarterly schedule is crucial to making the right decisions. If your income slows down for a few months, for example, and you don't adjust your budget, you could overspend your way into a financial rut.
  
  

Progress

• When you have kept a budget for several months, you can begin tracking your progress. By comparing each month's budget with the next, you can estimate how far you have come with paying down debts and building a savings. You can also identify patterns of behavior that help you better prepare for the next month. For example, if you consistently spend more than you are budgeting on something like groceries, increase your grocery budget and make cuts somewhere else.