Where does the idea of sitting down a coming up with a personal budget rank on your list of ?things I can't wait to do?? If you're like most people, it's probably somewhere between jabbing a fork in your ear and getting a root canal. Can't say we blame you, devising a budget for yourself is definitely not the most stimulating activity in the world. But for financial well-being, it's an absolute must. It needn't be too painful though. With today's technology, budget-making is pretty much a snap. Just remember, the goal of creating a personal budget is threefold: 1) to list your expenses, 2) to set future goals, and 3) to cut costs to meet your goals.

Where does your money go?

The first part is always the hardest when it comes to starting a budget. You need to find out where your money is going on a monthly basis. You could dig into bank statements, credit card receipts and check ledgers, then hand write every expense you come across on a sheet of paper. That's one way to go. The other, simpler way is to use the amazingly intuitive personal finance software that's available today.

Programs like Quicken and Microsoft Money were built to help you track your budget. Simply input your expenditures, divide them into categories (e.g., auto, food, clothing) and subcategories (e.g., fuel, dining out, shoes) and boom?the program will spit out a detailed report of your monthly income and expenditures.

An even easier way to track your budget is through online banking. Most banks offer a service where you can download past account activity and plug it directly into a finance program. It some cases, it'll even categorize your spending for you. How easy is that?

What are your goals?

Thanks to your software program, you've just discovered how much per month you drop on those gourmet coffee drinks you love so much, great. But now what? Now you need to set some goals for yourself.

Don't be shocked if your report says you're spending more than you earn. It seems unfathomable, but Labor Department statistics show that many families who make less than $50,000 are spending a bit more than that annually. If you're one of them, it's time to slash your spending. Even if you're not in that boat, there are still probably a few expenditures you can do without.

As a general rule, you should reduce your spending to 90 percent of what you bring in. The rest of that money should go into savings and/or investments.

Slash and Burn

Upon further review of your budget, some cost-cutting measures will become painfully obvious. Eating out and other entertainment costs will probably stick out the most. Expensive clothing might be another. Search for those small, trivial costs that you can do without and eliminate them. You won't miss them.

While the little things can kill, there are also bigger costs you can probably reduce. Take a deep, long look at your lifestyle. Is your car a little too luxurious for your pay scale? Are you dining at five-star restaurants a little too often? Are weekend getaways becoming routine? If so, cut back. It may not be pleasant, but it's necessary.

Finally, take a look at things like your bills and taxes. If the mortgage you're currently paying is two or more percent higher than what's available, look into refinancing. When it comes to filing your tax return, make sure you're maximizing reductions.