1. Budgets are a necessary evil.
They're the only practical way to get a grip on your spending so that you can make sure your money is used the way you want it.

2. Creating one generally requires three steps.
They are: 1) identify how your money is spent today, 2) evaluate that spending and set goals that take account of your financial objectives, and 3) track your ongoing spending to make sure it stays within those guidelines.

3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you. They are excellent--and keeping track of your ongoing expenses will be easier if you bank online.

4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, keep a careful record of petty cash expenses to find out where that money is going. In general, any time cash expenses exceed 5 percent of your total spending, they need to be checked.

6. Spending beyond your limits?
If so, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in--thanks to the liberal availability of credit. This doesn't make you an automatic candidate f or bankruptcy--but it's definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries dressed as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries--even if you've been considering them to be filling a real need.

8. Tithe yourself.
Aim to spend no more than 90 percent of your income. That way, you'll have the other 10 percent left to save for your big-picture items.

9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains. (Caveat: In professions for which the year-end bonus is a reliable part of the income, budget for the lowest reasonable bonus and treat any overage as windfall.)

10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation.