The key to a successful budget is simple: write down everything!
I remember meeting a man who was having trouble paying his bills each month. He was always short of cash. I asked him to list where he spent his money each month. Off the top of his head he was able to tell me about his rent, and his car insurance, and what he paid for hydro, cable television, and his phone bill. Those numbers are the about the same every month, so they are relatively easy to remember. Then we got to the fun part: I asked him how much he spends at the coffee shop.
He had no idea, so we started doing the math. He started the day with a coffee, then had one at his morning break, and his lunch break, and his afternoon break. When we added it all up he was spending $400 per month at the coffee shop. (You can read the full story of Joe, and read about how Joe now has change in his pocket). It’s easy to see how a dollar or two on a cup of coffee can add up to a large number, so it’s essential that you write down every penny you spend.
If you record every penny, even the money you spend on coffee, you will know where your money goes, and you’ll be able to adjust your spending and save money.