Taking the First Steps

Why Budget?
Budgeting Myths
When to Start
First Steps
Picking a Budget
Budget Types
Better Budgeting
Next Steps
Helpful Hints
Couples & Money
Women & Money
Final Step

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With the development of any new habit—and budgeting is just that—a habit, the standard advice is to start small. Take baby steps, push yourself forward to the next one, and praise yourself for the last one. Starting with some of these "periphery" money behaviors will provide the springboard you need to dive in!

Get Organized

Gather your financial records.

Separate the important documents (stock certificates, wills, powers of attorney, etc.) from the routine statements (credit card, paycheck, utility, etc.).

Create a filing system:

	Current Working Files These are used on a routine, bill-paying session basis (your budget, checking account statements, credit card statements, utility statements, etc.).
	Reference Files These are used for standard information (household inventory, warranties, appliance manuals).
	Safety Files These are your important original documents (birth certificates, marriage license, stock certificates, deeds, etc.). Keep them safe.
	Archival Files These files are your repository of old papers.

Make sure you know where everything is, and have it ready to access. Create a couple of "Master Lists" that identify important information such as telephone numbers, credit card numbers, insurance and investment policy numbers, bank account numbers, etc.

If you are not in the habit already, get your checkbook balanced and reconciled. Get it up to date and ready to go.

Understand Where Your Money Goes

Gather information on how much money you spent in various areas on a weekly or monthly basis.

Look through your checkbook, statements, and receipts.

If you keep your checkbook electronically on the computer with a software package, run some of the "reports" that will help you see how you've spent in various categories. (The usefulness of these reports will certainly depend on how detailed you are when you entered the data. Sometimes you can go back through for a certain time period and edit the categories and sub-categories in a logical manner.)

Please do this exercise at least once in your life...

	Take a small pad of paper and jot down every penny you spend. Start with just making it through one day, if you have to.
	Carry this paper with you wherever you go. Graduate to making yourself do this for a week, then maybe a month or two.
	At least go through one full "cycle" of your money routine before you stop.
	Yes, this will be a tremendous pain! But, if you've never done this, please go through this exercise at least once in your life.
	Trust us, it will be an amazing eye-opening experience. You cannot gain the perspective of this "game" unless you play it. The pay-off is big. It will make a world of difference in your progression to controlling your money. Just knowing where your money goes is a terrific education in and of itself.
	You will be amazed, and learn things about yourself you didn't realize. And right away, you'll get some great ideas on how to improve your spending habits!
	This becomes the first building block of your customized budget!

Think About What Type of Budget You Want to Use

However you decide to do this, budgeting will be the most important financial step you ever take. Budgeting is the foundation upon which all good financial decisions are made. You'll never regret doing it, but you'll certainly regret not doing it!

The next 3 articles will help you decide what kind of a budget to choose.

	The first covers what to look for in a good budgeting system.
	The second refreshes your memory about the pros and cons of the traditional budgeting methods.
	The final article is a new way of thinking about budgeting systems. It provides a new understanding of a better way to budget in today's world.

Next: Picking Out a Good Budgeting System