Back when we bought our second house, we found things got a little financially tight. Why were we going into overdraft every month?
To get things under control, we started an Excel spreadsheet to budget our expenses. We put in all the fixed expenses: mortgage, phone, internet, gas, hydro, insurance, and car payments. Then we added the ones that could be adjusted: groceries, travel, entertainment, gifts, and clothing. Because we were both on salary, our paycheques were easy to calculate. Then we sorted everything in date order, so we could make sure that there was enough money in our account to cover the pre-authorized debits between paycheques. Sometimes that meant waiting to get groceries until after payday. You can make a lot with a little if you have to. Limp veggies can still make a great soup!
It took a little playing with the numbers to get the month to end with a positive—or at least net zero—result. As the month progressed, we would update the expenses (or unexpected windfalls) in our little spreadsheet to actual amounts. It was a little exciting to see the formula at the bottom change from negative to positive. Each month the amount left over grew a little. Our bills were always paid, because of the pre-authorized debits from our account, but magically the account wasn't in overdraft anymore. The credit cards were paid off and continued to be paid off in full each month. Instead of having too much month left at the end of our money, we had a little extra money at the end of the month.
After a year, we had things fully under control and stopped tracking our money in our spreadsheet. But every now and then, when unexpected expenses crop up, we pull it out and it gets us through the month. In the black.
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