Well, dang! From what Ive heard and read, it looks like weve reached an all-time world-class new record in the amount of personal debt on the books. Now its probably not quite as bad as weve been led to believe, however many of us have managed to tromp further than we should have into the financial swamp. How well well be able to find our way back out to dry ground will depend on our knowing just where the heck we are in the first place. And that takes us right to the B word.

Budgets

For some of us, the word immediately congers up visions of frowning accountant-type folks, complicated computer programs and mountains of wadded up balls of scratch paper piling up around the kitchen table. For those of us who are fiscally challenged and would prefer to place our faith entirely in the benevolence of the Saints of the Oblivious Shopper, even the mention of the B word is enough to drive us to the emotional security of watching the latest TV reality shows.

I really hate to be the one to break the news to you, but just stuffing the bills behind the rooster cookie jar on the counter until you get around to paying some of them is not a real good start toward financial security. Nor is the technique of paying what you can until you run out of whatever money you think you have in the checking account. Both of these will have about the same effect as the time-honored technique of tossing the bills at the wall to see if they stick. You know what Im talking about, right? If they stick, they get paid. If not oh well, better luck next month!

Heres a suggestion for a fairly painless step toward controlling your personal cash flow. (Thats like making a budget but I didnt want to scare anyone off here) Get a spiral binder, pick a page and draw in a bunch of columns. No, it doesnt make any difference how many. At least five would be good.

In the first column, write down the names of your expenses. You know, like food, house payment or rent, gas, car payment, electricity, phone, child care, credit cards that kind of stuff. Put one expense name on each line as you go down the column. Dont forget the clothes, entertainment and insurance entries. Even if you pay your insurance quarterly or semi-annually, you need to break this down into a monthly expense so you can save for it or at least see where you stand. If youd like, its not a bad idea to list the expenses in payday groups. List the bills youll need to pay from the first pay day of the month in one section of the column and create a separate group for the bills that should get your attention on the second payday. Whatever works best for you.

In the second column, write down how much you normally spend each month for each of the expense entries in the first column. If youre not sure, take your best guess and write it in pencil. You can always make adjustments later.

At the top of the remaining columns, write in the names of the months that are coming up. Youll use these columns to record your actual payments as you make them.

Now, just for the heck of it, add up your estimated expenses and compare the total to your projected monthly income. If whats going out is more than whats coming in, you know right from the get-go that youll need to make some adjustments. If the figures show that you should have money left over at the end of the month but it never seems to work out that way, there are obviously some expenses youve forgotten about or maybe werent really aware of in the first place. How about maintenance on the house or car? Medical expenses? Birthday and Christmas gifts? Or how about eating out? Was this included in the food expense or the entertainment expense? And yeah, going out for lunch and the quick snacks or drinks at your favorite convenience store need to be included somewhere.

Next instead of shoving the bills behind the cookie jar when they come in, just toss them into the spiral binder on your current budget page. That way youll always know exactly where they are. When you pay them, be sure to remember to write down the amount in the appropriate column.

Here are a couple of hints on bill-paying. Do it first, right after payday before you spend the money on anything else. Plan ahead. Allow at least a week for the check to travel to your lender and be credited to your account. Two weeks is even better. The last thing you want to see is a series of late payments on your credit report. If you havent gotten a bill yet and you know it needs to be paid out of this weeks paycheck, hold the money and dont spend it on other stuff.

Debit cards are great but they can quickly cause problems if were not careful. If you like to make purchases with a debit card, be sure to tuck the receipt in your wallet and then remember to write the amount in your checkbook as soon as you get home. Then either write that amount in the appropriate column in your budget or simply toss it in the spiral binder for entry later. If you normally make several trips to the grocery store in a month, just paper clip the receipts together and enter the totals into your ledger a couple times a month. Weekly if you wish. If you like to pay your bills on-line, remember to enter the amount in both your checkbook and ledger.

All-in-one stores those that carry groceries and a variety of other items tend to complicate the budgeting process because we really should separate the purchases so we can see where were spending our money. Make it easy on yourself. If your basket is filled mostly with groceries and the other item purchases are small, just enter everything in the food column. If you normally purchase a significant quantity of other stuff along with the groceries, you should think about either separating the expenses yourself (a pain in the rear) or having them rung up separately as you check out (also a pain in the backside). Or maybe a separate trip through the store would work better for you. Your choice

Credit card payments. If at all possible, pay more than the minimum amount. Theres no reason to keep forking over your money in the form of interest payments to big corporations for the next umpteen years if you can avoid it. Its best of course, if you can pay any credit card debt off monthly. If thats not possible, then concentrate first on the high-interest cards to get them out of the way as soon as possible. Pick one and do everything you can to get it paid off. Then go to the next one on the list and take care of it. I dont need to remind you that its not a real good idea to charge more on these cards while you working so hard to pay them off, do I? Nah, I didnt think so. While youre at it, once a card is paid off, seriously consider canceling it. Theres no good reason to have more than a couple of credit cards of any type in any one household. So remove the plastic temptations from your wallet and take one more step away from the swamp.

One more thing on credit cards. OK, maybe a couple more. Credit cards are for convenience and maybe emergencies. Theyre not to live on. Convenience for those individuals who find it advantageous to accumulate their expenditures so they can make a single payment once a month. Uh folks, thats not a good approach for most of us. We can too easily slip into believing that whatever limit is showing on the card is really our money and spend accordingly. A direct path into the swamp. As far as emergencies are concerned, its better to have a stash of cash set aside to handle those unforeseen events, however sometimes that just isnt possible. So OK, use the cards for emergencies if necessary, but your budgeting still needs to include a potential emergency repayment amount. And lets face it, if youre stashing cash for emergency repayment it wont be long until youll really have the money available to cover most situations and you wont need to use the card anyway. By the way, if your credit is in good shape, its far better to snag a bank or credit union loan at a much better interest rate to handle those emergency expenses. One last thing on credit cards. If you cant pay the bill in full each month then dont use them to eat out. That creates some very expensive meals that will provide you with just enough energy to lead you even further into the swamp.

So where is this leading us? Well, after tracking all I repeat, all your expenditures for two or three months, you should have a real good idea of where you stand. If your monthly expenses including allowances for maintenance, entertainment and emergencies is greater than your income, you only have a couple of options. Either increase your income in some way such as through a part-time job or reduce your expenses. Thats about it. And sure, if youre facing a major financial crisis, credit counseling may be the way to go. If thats the case, be careful of the organization you choose to help you out. Articles in MSN Money indicate that youll be safe if you stick with either Consumer Credit Counseling Services or Myvesta (a non-profit financial crisis center).

The bottom line? By using the spiral binder budgeting technique, youll be able to quickly get a better grasp on where your money is going and youll be able to see at a glance where you stand at any time during the month. Hopefully, youll be able to also set aside some coins not only for emergencies but also for the more fun things like vacations. And if youre not doing it already, work toward being able to slide a portion of your earnings into a long-term savings account. By paying off the old credit cards, youre already taking major steps in that direction but as soon as possible, establish a real savings account where you can earn at least a little interest on your money. Consider having this direct deposited into the account from the amount you earn at your job. If you dont see it, you wont miss it as much.

One last thing. Be sure to tell your kids that the secret to a really comfortable retirement is to save just ten percent of everything they earn. Nah, they probably wont listen but its good advice anyway