Budget's have gotten a bad rep because some people make them more complicated than they need to be, but there's no reason to lie here: having to account for your money is no where near as fun as spending it on anything whenever you want. You just have to decide if you are committed to eliminating debt or if you're going to let the “b” word scare you off.

When creating your first budget, or one that you are dedicated to live within, the first thing you'll want to figure out is how much money you have each month after you pay all the necessary, monthly expenses.

Create a new list! This time, you'll want to make a list of your monthly expenses. Include everything from your car payments to your rent or mortgage payments to utility bills and food. Some bills may only come every three months, and some bills may not be exactly the same each month, but make your list with monthly amounts by figuring out how much each bill is on a monthly basis. If your car insurance is paid every three months, just divide the amount of your payment by 3 in order to get the amount you would pay monthly. If your electricity bill fluctuates throughout the year, figure out the total amount you pay annually, and then average it over 12 months to figure out your monthly average bill- and pad the payment by a few dollars just to be sure!

Add up the total of all of your monthly expenses to get your total “must pay each month” figure.

Above it, write down your total income. For simplicity sake, just write down your income that you actually receive, and don't worry about what is taken out for insurance or taxes or any of that. If you're married, combine your after-tax income with your spouses to get a total monthly income.

Subtract your total monthly expenses from your total income. This is the amount you have left over each month (hopefully it is a positive number!) after you've paid all of the necessities, and it is called “discretionary income”.

Discretionary doesn't really mean discretionary though! This “leftover” money is what you use for expenses that don't really come out of your income monthly, like vacations, clothing, automobile or home repairs, gifts, etc. It's also where you get the money for your savings account.

If you find that you have no money left over at the end of each month, or that you make less than you must pay out monthly, you need to make some adjustments. You may have to cancel the cable television bill, or get another job for a while until things are improved. If you don't take steps to remedy this situation, you will not have any hope of making more money than you spend and therefore, no hope to eliminating the debt monster.

On the other hand, if you have a positive number of discretionary income, you can then multiply that number by 12 to get your annual discretionary income. With this number, you can divide up this money into the “odds and ends” that must be paid for, from entertainment to cable tv, to car repairs and holiday shopping.