Building a budget is a complex process, but it’s also a necessary one. A well-planned budget is the cornerstone to a healthy financial life, and will allow you to save money for the things that you truly desire. It will also help you repair your credit, and in some cases even maintain the strength of your relationship. Overall, a healthy financial history is valuable for many reasons.

Start Saving Now

A healthy budget requires a healthy savings. You should save for your emergency savings fund first, and then your retirement fund and then your general investment accounts. An emergency savings fund should include three to six months of expenses, while your retirement fund should always be maxed out. After this, you can start investing. Never neglect your savings accounts.

Generate Your Financial Statements

You need to have a reliable picture of your income and expenses before you can make any radical adjustments to your spending. Otherwise you may be cutting areas that are already quite reasonable or adding to areas that you really need to cut down. Quickbooks, Quicken and Mint are all valuable tools that can help you in the construction of a reasonable budget.

Make Intelligent Choices

You will need to start making more frugal choices about your living situation. Ask yourself if you really need an expensive apartment now when you could buy a larger house later, or whether you really need an expensive car or if you could get an inexpensive car or even rely on public transportation. Living financially well is a lot about trading off on the things that really don’t matter to facilitate the things that truly do matter like your continued financial stability. This also includes cutting out expenses that really aren’t required, such as extra vacations and eating out.

Keep it Organized

If you give yourself a space to pay bills, look at your checkbook and go through your monthly expenses, this will make your financial system a lot easier to deal with. Sit down and try to get organized about your expenses and you will eventually get into the habit of looking at your expenses with a critical gaze. Remember that you should be looking through your monthly credit card statements and your debit card spending if you are to have any hope of controlling your expenses, and that you should always make it a point to examine your receipts.