DO think of your budget as a planning device and a way to reach your financial goals.

DO take the time to figure out where your finances are now. Keep track of your monthly expenses to determine where you spend your money. Add up monthly income from all sources. After you subtract your expenses from your income, you will be in one of three situations: (1) your income and expenses may be about equal; (2) your expenses may be more than your income; or (3) your income may be more than your expenses. No matter what your situation, you need to make some judgments about it.

DO take the time to make a personal balance sheet. Make a schedule of your assets and liabilities to find out your net worth.

DO set personal financial goals for yourself. Are you saving for the down payment on a new home? Maybe you would like to buy a new car in the near future. One of your goals might be to maximize the contribution to your 401(k) plan. You may want to take a vacation to Hawaii next year.

DO prioritize your goals. Saving a down payment for a new home may be more important to you right now than maximizing your 401(k) contribution. Because you only have limited resources, you will have to allocate them according to your priorities.

DO limit your budget projections to a couple of months ahead until you get the hang of it. After that you can budget further ahead.

DON'T think of your budget as cast in stone. Although you do need self-discipline to stick to a budget, things change. Expenses go up (and income can go down), so you will have to revise your budget accordingly.

DON'T create a budget that is too strict. Give yourself some wiggle room, especially with expenses for goods or services that you feel you can't live without.

DON'T get frustrated if you do not immediately comply with your budget. In all likelihood, you have forgotten some regular expenses. Use your budget as a guide. If you overspend in the same category every month, you probably need to change the projected amount for that category.