Step 1: Calculate what you spend

Before you institute a plan, try the following to add up your monthly expenditures:

►Gather your paperwork. Pull up last month’s bank and credit card statements to see a list of your purchases and bills paid. If you frequently use cash, use your debit card to pay for cash purchases for two weeks (or keep receipts) to get a clear picture of what you spend in a month.

►Add seasonal costs. Add up all your irregular expenditures (like tax payments or vacations) in a year and divide by 12 to come up with a monthly amount you need to put aside to cover them.

►Don't forget debt and savings. Estimate how much you can put toward paying down debt and building up savings each month.