In uncertain economic times, it’s a smart idea to know where your financial status stands. If you’re looking to start cutting down on expenses, the best way to do so is creating a personal budget:

• Know Where You Stand - Write down everything that has to do with your money: cash on hand; checking, savings and retirement accounts; and how much debt you owe to credit cards, loans and mortgages. Note balances, interest rates and what’s due every month. Also make a list of repeating transactions you pay, such as the $40 a week to the babysitter and $60 a month for your cell phone bill.
• Balance Your Checkbook - Make sure your checkbook is up to date and all checks written out are accounted for.
• Outline Your Goals - Note how much you’d like to save, how much you’d like to put towards debt and how much you will limit yourself in personal transactions.
• Buy Budgeting Software - Software like Quicken and Microsoft Money are great ways to see an outline of your budget and goals. Or save money (that is your goal, correct?) by trying a freeware program like Money Manager.
• Downsize Your Credit Cards - If you have 10 credit cards and nine of them have balances, try and pay down some of the balances or do a balance transfer so you have debt on less cards. You’ll find that budgeting will be a lot easier with a lot less numbers (and bill due dates) to remember.
• Write Down What You Buy And Pay For - Everytime you buy or pay for something, write down what you bought, the date, and how much it cost.
• Understand Where Your Money Is Going - At the end of each day or week, look at the list of what you bought and separate it into categories - Excel spreadsheets work wonders here. For instance, you make make categories like Personal Purchases, Gas, Food, Credit Card Payments and Mortgage. You may find that you’re spending $100 a week on clothing and want to cut down in that area.
• Save Receipts - Save all receipts to make sure they match up to any credit card or banking statements, or even to make sure you were charged the correct amount. Toss menial ones, like supermarket or ATM slips, when you’ve confirmed everything matched up. Save receipts for major purchases, such as items that have a warranty, and file them away in a safe place.
• Save Bank And Credit Card Statements - File away all bank and credit card statements. If you have gone paperless with your bank or credit card statements, download and save the statements on your computer.
• Hire A Financial Advisor - If you’re having trouble starting or maintaining your personal budget, you may want to hire a financial advisor to help you with your goals and keep you on track