Making a budget is a relatively simple process; sticking to a budget is a relatively difficult one.

Making a budget really doesn't need to be complicated. If you're drawing up a basic household budget, all you really need is a pen and piece of paper. Take your piece of paper and fold it in half lengthwise. On one side write Expenses, these are all the things you have to pay for on a monthly basis. On the other side write Revenues, this is all the money you have coming in, whether from work, or other sources.

Expenses are usually things like:
- your credit card bill
- your car payment, car insurance, etc.
- mortgage payments
- utilities, among other things. Total up each side. If your revenues are higher than your expenses, you're a-ok, if your expenses are higher than your revenues, you're in trouble. And this is where you have to start tweaking and figuring out what you can do without or where you can cut back.

The main difficulty people have with sticking to a budget is not that they don't want to or don't have enough willpower; in my humble opinion, the main issue is all the pressure we get from the world. Now, this may sound like I'm giving an easy out to a lot of people and in a way that may be true, but it's also true that we're constantly bombarded with tons of advertising or ideas almost forcing us to go out and buy something.

For instance, maybe you think it's not necessary for you to have a TV at home because you don't watch it much and you don't think it's necessary for your kids to be watching it either, especially with all the information out there telling you it's bad for them. But your friends and family tell you you're doing your children a disservice by limiting them from TV. After all, when they go to day care or school they won't know who all the characters are from all those cute TV shows. So off you go and get the cable package with the kids' cartoon channel.

Or maybe you want a little old fixer-upper of a house that has enough room for you and your family to live in but all your friends or family have big houses, many of them new with ten foot ceilings that you have no idea how you'll afford or even how you would clean those ceilings.

Maybe you want to homeschool your kids but everyone around you tells you that you're going to turn out a socially withdrawn, maladjusted child.

What does homeschooling have to do with budgeting? The idea here is that you have to set out what your needs and wants are, IN THAT ORDER. Will you die without food? Yes. Will you die without TV? No. Will your kids die if they're not homeschooled? No. But if you want to homeschool them and you've got limited amounts of money, you need to figure out how to make that work. Because you'll still have other bills to pay.

So basically, the main idea of budgeting is to set down on paper what are the things in your budget that you simply CANNOT live without. Food/water, shelter, clothing to a certain extent. It's always possible to buy second-hand clothing if needed. But you do need to eat and you do need to drink water, you need to bathe, you need a roof over your head.

Now, having said all that, you don't have to be a stick in the mud and never eat a hamburger or get take-out. You can enjoy certain things a little. But if you're trying to pay down a debt, or trying to save some money, or likely both, then you know what to do.

Needs versus wants.