The most obvious first step is to prepare a budget and although it may not be everyone?s Idea of fun it is nevertheless necessary if you are to take the first step towards overcoming your financial situation.

Have you seriously considered preparing a budget? Not just a mental note but a written exercise taking a long, cold, hard and truthful look at your predicament.

It may sound a very obvious statement to make but the first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. The operative word here being ?realistic.? It may not be pleasant to be so forthright about your own circumstances but if you choose to ignore certain aspects then you are just deceiving yourself and the whole exercise would become a complete waste of your time.

Start by taking a blank piece of foolscap paper and divide it into two halves by drawing a line down the middle of the page. On the top left side of the page write a heading of ?Income? and on the top right side of the page write a heading of ?Expenses?.

Commence by listing in the ?Income? column all your income sources to include wages (full time and part time) for yourself and/or your partner, rental income etc.

Next, concentrate on your expenses.

In the top right section of the page, list all your "fixed" expenses ? those that are the same each month ? like mortgage payments or rent, car payments, and insurance premiums.

Then, list the variable expenses ? like groceries, entertainment, recreation, and clothing

Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest.

The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.

Once completed, analyse your figures. Ask yourself some very hard questions!

?Do I really need to buy this item?? Do I have to have that latest gadget??

Sometimes, just by performing this very basic task you may find that you can make some very obvious savings.

Once you have carried out this exercise, it is a good idea to go through it again in a month?s time just to make sure that your spending is not reverting back to it?s bad habits.

A useful suggestion would be to make use of your computer. Computer software programs can be useful tools for developing and maintaining a budget, balancing your cheque book, and creating plans to save money and pay down your debt.

If you do not own a computer you can utilise your public library and bookshops as they have information about budgeting and money management techniques that you could find beneficial.

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