Carry a small notebook or some other small record-keeping device with you for writing down everything you purchase with cash, a debit card, or a credit card each day. Keep all your receipts as well. You'll need this information at the end of each month when it's time to evaluate how well you're doing.

Checking your progress each month

To live on a budget, each month you must compare your actual monthly spending to what you budgeted. Here's how:

1. On your monthly budget, add a column to the right of each dollar amount that's labeled "Actual."

2. Compile all your spending records for the month (check registers, bank statements, receipts, the information in your spending notebook) and all your income records to figure out your actual expense and income numbers.

3. Record these amounts in the appropriate places in the "Actual" column of your budget for the month.

4. Calculate subtotals and grand totals for the month. If you spent more than you budgeted on something, or if your total spending exceeded what you budgeted, try to figure out why you spent more. Here are some possible explanations:
You overlooked a living expense or debt when you developed your budget.
Your budget isn't realistic. It's too bare bones, so it's impossible for you and your family to live on it.

Your family didn't try hard enough to live according to your budget. Making a budget work takes a 100 percent commitment from everyone in your household. You were hit with an unexpected expense that month. For exam- ple, you were working late at the office, so your childcare expenses increased, or your car broke down and you had to spend money to fix it. Some of your expenses increased for reasons beyond your control. The cost of gas went up or your insurance premium increased, for example.
Your income dropped. Maybe you had to take a cut in pay, your sales commissions were lower than usual, or a client didn't pay you.

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