• Step 1: Take Stock of Your Situation - Jot down your current financial situation. Don't worry about the exact amounts and all the small items; the goal is just to get a general overview. What are your current bank balances? Any other liquid assets? What are your current major expenses? Any significant loans or other debts? Do you anticipate any major changes in the next few months like a bonus at work?

 
• Step 2: Analyze Your Expenses - Look through your checkbook and your last few credit card statements to see where your money is going. How much is spent on essentials (food, housing, transportation, medical care, etc.) versus entertainment and luxuries. Do you feel comfortable with the ratio of needs to wants spending?

 
• Step 3: Make a Budget - Now that you know where your money has been going, make a budget for the next few months. Again, don't worry about the small amounts. List the major expenses, but be honest. Include realistic values for essentials like utilities, transportation, food, and work-related expenses. Once the budget is complete, ask yourself: Are you living within your means? Is there extra money for savings? Are you satisfied with how your money is being spent?

 
• Step 4: Identify Opportunities for More Income - If you are not happy with your current spending and your budget, first look for opportunities to increase your income. For most people, the main opportunity for further income is to put in additional hours at work. But, try to consider all your options for further income including part-time jobs.

 
• Step 5: Identify Opportunities to Cut Expenses - No matter how great your budget looks, everyone can find opportunities to cut expenses. Typically, this means identifying entertainment and other optional purchases which can be cut out. Look in the easy places first such as eating out. Although television feels like a necessity, examine your monthly spend on cable, satellite, or movie rentals. If your financial situation is severe, you will have to think creatively for cuts.

 
• Step 6: Wipe Out Your Zombie Expenses - Entire businesses are founded on the fact that consumers are too lazy to cancel services. Look through your checkbook and credit card statements. Find any old monthly expenses that you never bothered to cancel, such as subscriptions for magazines and newspapers you never read, unused safe deposit boxes, online websites and services, etc. Examine items that you might not have priced recently, such as insurance, mobile phone plans, long distance calling plans, etc., for potential savings. Are your memberships still appropriate for your lifestyle, for example, AAA or gym memberships.

 
• Step 7: Plan for the Future - Now that you have examined your current finances, set aside time from next weekend to plan for your financial future. Are your assets growing at the rate you want? Does your spending reflect your long term goals? Are you preparing appropriately for retirement? Do you have necessary insurance to protect your family from major events?

 
Hopefully, going through these seven simple steps sheds light on your current spending and suggest ideas for positive changes.