You probably know how much money you made last month, but do you know how much money you spent? Or how much money you have left to spend this month? If you don't you're not alone; most people have no idea. The fact is, most of us spend 10 percent more per month than we make. That comes out to $431 per month, based on the average American income. No wonder the average credit card debt is growing!

How did we get here?
So why is it so difficult to track spending?  Today we live in a near "cashless" society. Using debit cards, credit cards, automatic deposits, and wire transfers, we rarely even see our money. It's easier than ever to spend, spend, spend! Taking the time to make a household budget can help you meet your short and long-term goals as a homeowner and a responsible consumer.

Finding a budget system
There are plenty of personal finance programs and services out there, and often that's what we need to get serious about controlling our money. Many people like the ease and structure of such programs as Quicken or Microsoft Money. Others budget with real envelopes or virtual ones, with programs such as Mvelopes and Snowmint Creative Solutions' Budget system. Money-saving mavens such as Mary Hunt, Dave Ramsey and America's Cheapest Family offer lots of great ways to keep a budget, save money and cut expenses.

Let's get started
You will need a little time to develop your budget, but the investment of a few hours could literally change your financial life. It's important to get everyone who is a spender in your household involved with planning the family budget.

Most of us have fixed monthly incomes, and totaling those is the first step in planning your budget. If you have a variable income, try to determine a monthly average you can count on.

What's going out
Next, and more painfully, get down on paper or computer what all your expenses are. Be sure to have on hand all current monthly loan payments, including mortgage, car loan and credit cards and totals for fixed monthly expenses, such as child care, membership dues, lawn care and cable service.

For variable expenses, gather invoices and receipts of your medical, utility, food, gasoline and car repair expenses from the last 12 months. This will give you an average of your monthly expenditures. You will also need records of annual or semi-annual expenses such as insurance, taxes and pest control.

Finally, tally all those little personal expenses that are so easy to lose track of, from movies and meals to toothpaste and magazines. When you've finished, you will have a complete and no doubt daunting look at how much money is really going out every month.

Where do you stand?
Next, you need a game plan of how much you can spend without going over your budget. Be realistic in your budget assessment. How far over your monthly income are you currently? How much are you saving each month? Be sure to leave a buffer in your budget to provide for possible increases in some items, such as school tuitions, insurance, car or home repair, medical expenses and taxes. Then get ready to trim the fat!

Where can you cut back?
Don't be content with your current rate for natural gas, credit cards or insurance. It always pays to call your gas/heating oil, insurance carrier and credit card companies to see if they have a cheaper rate program available. If not, start shopping around! Also check to see if you can reduce your phone bill by signing up for an alternate plan.

Food is one place where all households could save money with just a little planning. Cutting back on restaurant meals, making a weekly meal plan and being a thriftier shopper could easily save you hundreds of dollars a month. Sites such as Coupon Mom and The Grocery Game are great places to get started with coupon shopping.

Most of all, keep track of what food you have on hand and what you need. Stick to your grocery list and buy in bulk when items you use go on sale.

Buying a yearly Entertainment Book is an easy way to save on things like restaurants, movies and shopping. There are many strategies to use, but being conscious of what you're spending is the first step.

Never stop tracking!
Okay, now you've got a complete picture of your monthly income versus expenses, you can see where your money is going, and you've got some ideas about how to cut expenses. Remember that none of these accomplishments will gain you any ground in the battle for financial independence unless you commit to keeping track of it all in your budget system! Whether you use a simple spreadsheet or opt for one of the methods above, you have to enter your expenses regularly or you'll lose control all over again.

Fear not! Keeping hold of your money is an empowering and addictive practice. You're on your way!