As any bankruptcy lawyer will tell you, uncontrolled spending is one of the surest ways to land in financial trouble. One solution is to create—and stick to—a budget. It is not only a tool for managing your money but it helps you understand and adjust your spending habits. Below are some tips for creating an effective budget to gain control of your financial life.

5 Tips for Creating an Effective Budget

1. Identify How Much You Earn

Before you decide how much you can afford to spend, you must first know how much you make. For those on a salary, this may be an easy task. However, for those who are self-employed or who don't work a set number of hours per week, it may be more challenging. If your income is irregular, figure out what your average monthly income was over the last six months—or better, a year—and use that amount as your baseline income.

2. Calculate Recurring Expenses

Add up what you spend each month on non-discretionary expenses. These include rent or mortgage, water, electricity, gas and heating, and more. Create line items in your budget for each type of expenditure: housing, utilities, student loans, etc. Be as specific as you like; the more line items you have, the more work and input the budget will require, but the more insight you will eventually get into where your money goes.

3. Estimate Discretionary Expenses

Create line items in your budget for discretionary expenses. This can include groceries, entertainment, clothes, household products, or any category of items on which you regularly spend money. Estimate what you should spend each month. Include line items for a savings plan and emergency fund.

4. Track Progress

Each month, keep track of your spending in each category. If you must, save receipts. However, it's easier to track if you utilize a debit or charge card that lists the establishment where you've purchased things. You can get a good idea of how much you've spent on gasoline, dining out, groceries, clothing, toys, and other items by adding up what you've spent at the grocery store, restaurant, or gas station.

5. Make Adjustments as Necessary

If you find you are regularly overspending in one area, you can adjust the budget amount upward or find ways to cut spending. For instance, you may have originally underestimated your grocery spending needs, so give yourself more leeway. On the other hand, you may be shocked at how much you're spending at restaurants, so you might want to curb that activity to save money.

If you have trouble sticking to your budget or the savings you achieve are not enough to get you out of hot water, consider hiring a bankruptcy lawyer to give you some breathing room. Contact Swartz Law Office, an experienced family law practitioner and bankruptcy lawyer in Batavia, OH. Donald K. Swartz has served clients in and around Clermont County since 2011 after nearly 10 years at a large Cincinnati firm. In addition to bankruptcies, he also maintains practice specialties in child custody, trusts, wills, estate planning, and divorce. Visit the firm website to message them online, and call (513) 732-0900 for advice from a proven bankruptcy lawyer.