As we move from children to adolescents and young adults, we are taught many things, both from our parents and from school, but the one thing that the vast majority of people are never taught is how to budget money. Unfortunately, this is the skill that everyone should know about. Keeping a proper budget and keeping track of what your money is doing is the best way to avoid debt and build wealth.

Money is a powerful tool in life, if we learn to make it work for us. Most people work for their money, but once they have it on their paycheck, most of the time they don’t record it once it hits their checking account. Writing expenses in the check book register is not keeping track of your money because once you write it down there, you never look at it again.

Learning how to budget your money is an important step in your financial health. Once you’ve written down your income and expenses, you’ll start to see where your money is going, and some of it may surprise you. It will be the small expenses that accumulate the fastest. Spending five dollars on lunch every day, or that morning coffee on the way to work, can add up to several hundred dollars a month. That’s the money that could do the most good if used smarter.

Let’s put some math into that. If you spend $ 5 a day on lunch during the workweek, that’s $ 25 a week or $ 100 a month, plus or minus $ 5. Over the course of a year, $ 1200 is spent on lunches. If you start adding in all the other small expenses that occur every month, you may find that you have enough to pay off any debt you may have, but you also start saving for a healthy financial future.

The first step in learning how to budget money is to write everything down. Start with your monthly income and write it at the top of a sheet of paper. Now you know how much money you have to spend during the month. Start calculating all your monthly expenses. This includes everything from mortgage and utility payments, car payments, credit cards to the smallest expenses. Write them down by keeping them in specific categories. Subtract your expenses from your income and see what is left.

This is your first budget because it shows you what your money has been doing each month. Now that you do have a budget, you can see it, it becomes a lot easier not only to see where the money is going, but also to regain control of where the money is going. And when that happens, you can start setting goals, both short-term and long-term, for your money.

It will take some time to adjust your money budget. Most people say that if you stick with it, you start to have a clear picture of your budget and financial situation in about 3 months. If you’ve never learned how to properly budget for money, the best way to get started is to just get started.