A budget is a necessary evil. You can’t effectively manage your finances without one. Having said this, sticking to a budget is another issue. Most of us find ourselves constantly deviating from our budget with the problem probably lying in our spending’s, but then again you might have formulated a budget that doesn't quite cover your financial obligations effectively.

Creating a budget generally requires three steps:

• Identifying your spending habits
• Evaluating your current spending and set goals that take into account your long-term financial objectives
• Tracking your spending to make sure you stay within your budget

Let’s dig deeper into the above three steps.

Identifying Your spending habits

We have all been spending money since our childhoods meaning you can’t create a budget without first looking back into your spending habits. Your spending habits will create the basis on how your budget will be created, and will act as a guide to how you will allocate funds to the different categories in your budget.

To best identify you’re spending habits store receipts of all you’re spending in a given month. If this is impossible, record each spending. At the end of the month add up the total to know exactly how much you spent.

Do this for at least 3 months to have an approximation of how much you spend each month, this will give you a picture of how much you should allocate for your monthly spending.

Evaluate your current spending and set goals that take into account your long-term financial objectives

In Madonna’s words, “We are living in a material world.”

In as much as spending makes us happy, don’t sacrifice your long-term financial objectives due to your spending habits.

Identify those important spending items, areas where you can cut down on or things you can do without all together so that you can maximize on the funds you will allocate to your long-term financial objectives.

Track your spending so that you stay within your budget

After applying the two steps mentioned above, create your budget.

Things won’t fall into place immediately so you’ll need to keep track of your spending to make sure that you stay within your budget.

To achieve this you could walk around with a copy of your budget in your wallet or purse or better use Easy Envelope Budgeting Aid (EEBA) Application for mobile phones.

EEBA is a tool designed to help you be accountable to budget limits.

Keep track of all your spending’s will protect you from those spending creepers such as falling into the temptation of spending on a promotion. Tracking your spending keeps you aware of how much you have left for spending.