How much are you starting with?

Step One:

Whenever people talk about money, if you yourself have no idea how much you make or where it is going then what they say will probably be irrelevant.  Just like if someone is trying to converse with you on a topic you know nothing about you will be a horrible conversation partner and you probably not remember much about the conversation.  Your brain does not know where to store the information in a logical manner so you can retrieve it later in a quick manner.  It is that random folder on your desktop on your PC or Mac that you don’t know what to store it under.  After a while you forget where it is and probably that you even had it to begin with.

Thus at the beginning you should know about all of your accounts.  Sit down and take the time to find out how much you have in each.  Write them all down and pay no attention to organizing them.  Start with what you have and write down all of your bank accounts, where they are (at what bank) and how much is in each.  If you can it may be helpful to note whether it is a savings account or a checking account and also note if there is a minimum balance required and if it accrues interest.   While you have it out also make yourself aware of any fees.  Some banks have a nice organized fee sheet and some do not.  Be aware of who you are dealing with as they have your money.  Some bank just want to nickel and dime you to death. If you have one of those just close the account and move it.  Your bank accounts should be just that a bank account and not a credit card.  That is a whole other section.  But make something like this so you can see it all organized.

BANK    Account Type    Minimum Balance Interest Accrue Lots of Fees    Amount in Account      
Chase   Checking        No      No      No      1,000.00       
National City   Savings 500.00  0.02%   No      5,000.00       

This is made up information but it should give you an idea of how to start getting organized.  After the bank accounts you should go through what you owe; student loans, car loans, credit cards, lines of credit, mortgage and anything else you owe money on where you have an account and a monthly payment.  You can use the same table as above only change the headers to the relevant information.  Use APR (interest you owe) instead of interest accrue.

Then you should go through fees that you pay that are not monthly like I pay my car insurance every 6 months instead of every month.  Another example would be car registration fees, renters or homeowners insurance and also maybe property tax.  Put these in a table similar to the one above and change the headers to relevant information like; when due (annual, twice a year) estimate amount (allow for some leeway as these can change every year).

While we are on the subject of payment frequency you can continue on to making a table of what you pay monthly.  On this table leave out any accounts that you have previously put in any of the previous tables like credit cards for example.  We need to determine your base line expenditures without factoring in paying down debt.  The example of mine is below.

Description     Amount  Due Date       
Rent    675     1      
Internet /Cable 64      25     
Cell Phones     140     19     
Gas Heat        50      28     
Electricity     50      25     
TOTAL   979            

Thus you should now have 4 different tables. 

1.      For the money you have

2.      For the money you owe

3.      For the semiannual and annual payments

4.      For monthly services

If you have had the good fortune of setting up any retirement accounts go ahead and make a table for them.  We are less concerned with how much is in them.  These accounts will be more important as we discuss budgeting as we will be factoring in an amount to stash in them each month.

These table should give you an idea of your starting point.