Add your expenses and compare the total to your current income. Are your expenses more or less than your income? If they are more, what can you do to bring your expenses in line with your income? Consider adjusting your expenses by using one or more of the following methods:

• Cut spending. Which would be the easiest variable expenses on which to cut back? Do you buy things you don't need?

• Increase your income. What are the possibilities for part-time or temporary work to help supplement your income?

• Don't buy on impulse. If this is a problem for you, a spending plan will be a great help. Tell yourself, "If it's not in the budget, I can't have it." Then take your own advice.

• Barter or trade for services. Trade your skills or a product with someone else without using money.

• Substitute a lower-priced item or similar item for something you must buy.

• Borrow or rent things, rather than purchase them, if they won't be used frequently.

• Look at your other assets. What savings or investments do you have that could be used, or converted to cash, to meet emergency expenses? Keep in mind that borrowing and using savings should be only a temporary, last-resort solution.

• Reduce your fixed expenses. If too much of your income is going to fixed expenses such as housing or debt payments, there may not be enough money left to cover your other living expenses. As a last resort, you may need to refinance your loans or move to lower-cost housing.

After you have adjusted the amounts you will be able to spend in each expense category, enter the new amount you plan to spend in the column labeled "Goals" on the Spending Plan.

The Record of Budgeted and Actual Expenditures worksheet, will help you set up a spending plan for your current income by using the figures you recorded on the Spending Plan and Income worksheets.

By comparing your income and planned expenses, you can see what changes need to be made so that you don't spend more than your total income.