Today’s money hack is related to money planning.

If you find yourself worrying about money problems, the best thing you can do is to sit down and make a simple personal financial budget to record your income, expenses and savings. You will know exactly where your money comes from and goes to, making it easier to control the flow and curb wastage.

Financial stress, financial worry, cope with financial stress

Remember that attempting to manage your money better without making a financial budget is like trying to swim without getting wet. And just as in swimming, it is never too early or too late to start taking control of your finances and begin saving (Source: Federal Trade Commission). So if you feel anxious about whether you’re earning enough, saving enough or spending your money sensibly, make a personal finance budget before you do anything else.

This is because the first step to financial independence involves understanding where your money comes from and where it goes, so you don’t end up wondering what happened to your paycheck at the end of the month. If you make a good financial budget, you will be aware of your financial position at all times without wondering whether or not you are saving enough or whether or not you can afford something presently or in the future.

So in essence, once you create a financial budget and update it regularly, you begin to gain control of your money, rather than having your money control you, which is why financial budgets are also known as money plans.

You may wonder how to make a personal financial budget, and the internet is here to help you. There are plenty of personal budgeting apps and software these days that do most of the calculations for you. You can even create a personal budgeting spreadsheet on your computer if you’re financially savvy, or get back to the basics with a simple pen and paper.

All a personal budget requires is a record of your income and expenses, so you can figure out how much you are spending, as explained on Dave Ramsey’s site, under the budgeting section. That’s a basic requirement, and if you really wish to understand your spending habits, you can go ahead and create a highly detailed budget that records a variety of expenses, incomes, investments, and so on. The possibilities in the world of personal financial budgets really are endless!

Related: Personal budgets and children.