Assess Expenses and Cut Spending
Unfortunately, you can't avoid this bit of legwork when it comes to budgeting. Simply deciding to save money by resisting a candy bar here and there probably won't cut it. Before you can decide what you can and can't afford, you'll need to sit down and figure out where all of your money goes. This involves gathering receipts, bills, bank and credit card statements, and so on. Determine how much you spend on food (both eating out and in), entertainment, Internet access, utilities, gasoline and anything else.
Once you know where your money goes in detail, you can make decisions about where you can and can't cut spending. Be creative: What do you spend money on that you can make at home? Do you need cable TV? And you may think there's nothing you can do about reducing your rent or mortgage payments. But don't assume anything -- you may be able to move to a cheaper place or refinance your mortgage.
If you're quitting a job, consider all the costs you save by not working, too. You won't need designer clothing, regular dry cleaning or monthly appointments at the hair salon.
Speaking of making things yourself, read about what you can cook up on your own on the next page.