(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)

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Question: I always seem to be running out of money all the time even before payday comes along. I've tried making a budget before and it does not work. I can't keep to it, and more so now that prices have gone up. I do want to save but how can I do it when there's nothing to set aside? ? Marie

Answer: Don't despair, Marie. There is always hope. The good thing is you have come to us for advice, and we would be glad to help you. In fact, that is what Take Charge of Your Money has been doing all along in its past columns: giving sound financial advice to those interested to put their financials in order. This is our 100th column.

Although you have tried making a budget, don't give up on it. A budget is the primary tool in taking charge of one's finances. With it, you will know how much you will be earning in a month, what expenses are absolutely essential, how much you can save, and how much you can spend on what you like. It sets your parameters, so to speak, so that you can manage your funds well and meet your financial goals.

You mentioned that your budget does not work and that you cannot keep to it. It is possible that you made a budget that's too stringent or not realistic. The prices of goods and services have gone up, and you need to revise your budget. You may also need to rethink the limits you set for your expense categories if you have extreme difficulty following them.

To make a workable budget, follow these simple steps:
1. Plot how much money you expect to come in this month. This will be your Money In, or your Income.
2. Pay yourself first - allot at least 10 percent for savings. You can do it and work on what's left.
3. Write down all the expenses you foresee you will incur within the month. Put the necessary ones first such as electricity, transportation, water, etc. For annualized bills such as tuition or insurance, get the monthly expense and input this in your monthly budget.
4. Based on your expenses last month and your previous bills, allot an amount beside each expense item.
5. If money seems to be short, commit to adjust the expense items that can be variable, such as food. To keep to this budgeted amount, eat more home-cooked meals and choose dishes that won't cost you much.
6. If you still have some money left, allot it as fun money which you can spend as you want.

With this budgeting style, you will be assured that you will be prioritizing saving for your future and will be able to meet necessary expenses.

Now it won't be a surprise if prices will still keep going up throughout the year, given the oil crisis. In that case, review your budget monthly and adjust if necessary to reflect price increases. This will help you avoid getting frustrated with budgeting.

If you see that your income won't be enough to meet your needs, find ways to increase your income. You can sell an asset you don't use, have a part-time job on weekends, or start a sideline business you can do after office or on weekends. The extra income will greatly help you.

Should your budget still seem too much, examine each expense item closely to find out where you can save. You may be surprised to discover that the little expenses you incur every day can put a dent on your budget.

Below are some seemingly small expenses you should be wary about:
? Car wash. That's a minimum of P50 a week, P200 a month, or P2,400 a year. Why not burn some calories and do the car washing by yourself?
? Coffee. If you buy it every day at a coffee shop at P100 per cup, you'll spend P500 a week or P2,000 a month. If you do it weekly, that's P400 a month or P4,800 a year.
? Parking. If you spend P30 a day on parking (and that's already small as compared to other parking areas), that's P150 a week or P600 a month, or P7,200 a year.
? Texting. Every text message you send costs P1. Analyze the messages you sent out in the past week and see which ones were unnecessary. You could have saved by not sending those, and using e-mail instead or the landline.

As you can see, we can all be caught unaware spending precious pesos on little things that don't seem to cost much. And yet, if you annualize them, you'll be surprised how much money went to them. The P4,800 annual coffee expense could have been put in a time deposit instead and earned you about 3.0 percent for the entire year. Given this, it does make sense to brew your own coffee at home to bring to work, doesn't it?

The bottom line is: take charge of your money. Find out where it goes, and where it should go. With a watchful eye, you'll manage your money better and build wealth for your future.

(INQUIRER.net and Citibank invite readers to ask questions regarding financial matters. Send your questions to personal_finance@inquirer.net or comment through our personal finance blog called MoneySmarts)

*Disclaimer: Readers are solely responsible for their own investment decisions and should thus conduct their own research and due diligence and obtain professional advice. INQUIRER.net will not be liable for any loss or damage caused by a reader's reliance on information obtained from our web site. INQUIRER.net receives no compensation of any kind from companies or industries or funds that are mentioned here.

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