This post is part of our series of “Fix your personal finances in 30 days“. A series dedicated to helping you improve your personal finance situation in 3o days without having to make any major adjustments to your lifestyle.

It may be hard for some people to believe, but a large percentage of people in America don’t use a budget to plan their finances. The majority of people have no clue how much money they spend each month or where the money is being spent.

Before you can get your personal finances under control you will need to create a budget. A budget is simply a planned list of incomes and expenses and a plan for saving and spending. Typical budgets are broken down monthly or weekly so income and expenses can easily be tracked. Creating a personal budget isn’t rocket science, but it will require a few minutes of your time to get things in order and even longer to follow your budget.

The first step to creating a successful personal budget is simply using a pen and paper to jot down all your typical monthly expenses and incomes. If you would like to take a look at our free budget examples follow these links free weekly sample budget worksheet or free monthly sample budget worksheet.

Now calculate your total monthly income. For most of us we will only have 2 or 3 sources of income. Your own income, your spouses income and maybe an additional part time income. Calculate your total monthly income and record this number.

Next, break your monthly expenses into categories. Some of you may have more or less categories than I have in the examples, but you will get the idea. Fill in mandatory categories such as housing, car payments, utilities, etc. first. After you record these numbers guess at what the other category totals will be. Remember your total spending MUST be less than your total income. If not you will have to deduct money from the non-mandatory categories.

The next step will requires some time and effort, but will pay off in the end. You must record all your spending for the next month. Assign each transaction to one of your budgeted categories. This will let you know exactly where your money is going each month.

Finally, examine your spending habits and budget. If you find yourself with more expenses than income you will have to adjust change spending habits. This may be obvious for some, it’s why you are broke! Now you can at least see where your money is being spent and which categories need help. You may have to make drastic changes in your life in order to reduce your spending; however, if you want to get your personal finances in order a budget is necessary!