As soon as you decide that you are going to create a budget, start putting aside receipts instead of shredding them.

For budgeting purposes, only include your work income after-taxes, as shown on your pay stubs.

This step should give you an idea as to whether or not you are spending too much on discretionary items, like eating out. It will also tell you whether or not your current cost of living, including expenses like a mortgage, is too high for your income.

Be sure to set aside enough money each week for all of your fixed expenses, including your rent or mortgage, utilities, and online subscriptions. Then, whatever’s left over is the money you can use for discretionary spending, whether that’s buying food, going shopping, or putting money into your savings. [5] X Expert Source Samantha Gorelick, CFP®Financial Planner Expert Interview. 6 May 2020.

For example, a financial weak point could be eating out too frequently when meals at home could save you money.

Some people find that cutting out images of what they consider a financially successful lifestyle to look like, such as a photo of a vacation home, helps to motivate them and keep them focused.

For example, you might want to save up $3,000 for an emergency fund. Divide this up by the amount that you can set aside for it each week while staying in your budget.

For example, imagine that your goal is to save $30,000 for retirement over the next five years. There are 52 weeks in a year. Divide 30,000 by 260 (52 weeks times 5 years) and you’ll need to save $115 extra each week to make this happen.

For example, your budget may currently show that you have only $200 free for goal savings each week. Then, you will need to find goals that fit under that amount, such as putting aside $50 a week for an emergency fund. This is an important step because it takes your goals out of an illusion and into reality. It also helps to ingrain a habit of saving, instead of spending.

As you look over your budget, make sure to update your expenses by including any discounts that you’ve been able to negotiate.

For example, your phone company may be able to switch you over to a promotional rate in order to keep your business. As always, when talking with customer service representatives, try to stay friendly and focused. If you get too frustrated, just thank them, hang up, and call back later.

You might even consider using a bill payment application to keep your payments on time and to show you how your bill amounts change over time.