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Maintaining a budget can be really simple and pain-free. It doesn't have to involve expensive software or an accountant. All you really need are the following:

1. A lined notepad

2. A pencil and eraser, (or if you're really brave you can use a pen)

3. Three months' worth of bank statements, (get them from your bank, or print them out on-line.) This way you can use them as a reference as you go. If you want to get really detailed, get two copies of each statement.

4. A black and red pen/pencil or crayon, (if you're going to go into more detail, get a few more colors)

4. A couple of hours of time alone

Keep in mind, all you're doing when you come up with a budget is balancing what money comes in with what comes out. Take your bank printouts for the last three months and look at all of your deposits. Underline those with your black pencil. Then, look at all of your expenditures and underline those with your red pencil.
You are now looking at where you are in the black, and where you are in the red. Add up the expenditures versus the deposits and compare the two. Now you can see where you need to trim the fat in your budget. Whether you are trying to save up for a new car, or down payment for a house, or if you just need to rein it in a little, this will be a big help. Just knowing where your money goes can make you feel a lot more in control about your finances.
Now that you know what comes in versus what goes out, you can go into a little more detail. You can choose a specific color for each category of spending. For example, you can use a green pencil for entertainment, and a blue one for utilities. You can add as many colors as you need. This will be a good visual example for you to look at and determine exactly where your money is going. If you have a lot of green highlights on your bank statement, and money is tight, you know where you need to cut back.
This simple exercise is a really easy, free way to figure out how much money you have available in your bank account and is a great outline for how to spend your money in the future.

Learn more about this author, Allison Czarnecki.
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