Decide where to cut back and which categories you expect will increase.

Divide the revised amounts by twelve to arrive at your preliminary monthly budget. Adjust and readjust the figures until your monthly budget equals your monthly income. This may take some doing, but persevere. Be sure you allocate as much as possible to the category “savings and investments.”

If your income doesn’t cover your expenses, a budget will force you to make some hard choices. When you make a budget, you will have to decide what is most important to you and what you can live without. A budget won’t give you more money each month, but sticking to it will leave you with more at the end of the month.