Everything You Need to Know About Budgeting

Pop quiz: How much money did you spend last month and on what? Sure, most of us have a rough idea how much we paid for the basics, such as utilities, groceries, rent or mortgage. But do you know how much you spent — down to the penny — on little things, such as coffee, dining out, movies or drinks after work? Have you ever taken the time to keep a running tally of everything you shelled out cash for or charged to a credit card in a week, month or even a year?

"It’s eye opening the first time you do it to see how much you’re spending," says Jim Blankenship, a Certified Financial Planner in New Berlin, Ill. But it’s also a first step toward greater wealth. If you’re just starting out, it’s imperative that you create a formal budget to track your expenses. Once you’re older and know where your money is going, it might not be as important to have something on paper, Blankenship says. But you still should track your spending so you can revise your budget if necessary, especially if you have debt.

"Budgeting is the foundation of all your financial activities," he says. "If you don’t have the foundation in place, you’re building something that’s structurally unsound." In other words, if you don’t know where your money is going, you won’t be able to meet your goals — whether it’s paying off student loans, buying a house or saving for retirement.

With that in mind, the stories below will guide you through every stage of life. They will help you create a budget if you don’t already have one, give your existing budget a check-up, find extra money each month to pay off debt or save, and tailor a budget to ensure you won’t outlive your savings in retirement. Take a look:

Click here to continue reading, and for links to more great budgeting articles at Kiplinger.com.