You`ve now got a handle on what you feel you should be spending based on the natural restriction of available income. You have a budget prepared with target amounts that you are comfortable with. You`ve accomplished a giant first step but now have to take your budget to the next level – doing the actual budget! Keep all of your receipts. I can`t stress enough – all receipts. The most minor budget expense that is not controlled can throw your over-all budget into a tailspin. You have to know where every penny is going. Receipts are better than bank statements as they tell you the story. They show what you actually purchased so you are better able to decide whether that’s an expense or purchase you needÂ to make in the future. Be organised! At the end of the day look through your wallet or purse, pull out your receipts, go through your pockets. Place the receipts in a labelled envelope or accordion file. Once you are half-way through the month complete a mid-month budget. Add all receipts, quantify your non-receipt or low-receipt items (usually your fixed costs). Place these totals in the right budget category and compare these expenses to your blueprint or target amounts. These totals should be roughly half of your target amounts. If they differ significantly, look at your receipts and determine why. Make any necessary adjustments to your targets and continue on. At month-end, total the rest of your receipts and add them to your mid-month numbers. Record your differences from what you actually spent to your target or blueprint amounts in your `Differences` or `Variance`column. The differences should not be great if you`ve adjusted at the mid-month period. Determine why these differences exist and whether you are willing to address them based on your priorities. Make whatever adjustments you feel necessary and re-evaluateÂ your target or blueprint amounts for the following month. Congratulate yourself! You`ve just completed your first monthly budgeting cycle.