Many personal finance experts recommend making a budget. While that is good advice, it's easier said than done. Who has time to classify each expense into categories like "groceries," "utilities" and "mortgage"?
Software and online tools can help with this task, but here is an alternate, low-tech solution: Take your savings off the top, and then spend the rest.
Do this by following these four steps.
Step one: Decide what percentage of your overall gross income that you would like to save for retirement. Many experts recommend saving between 10 percent and 20 percent, depending on your age, existing portfolio balance and expected number of years until retirement.
Arrange with your human resources department to have those retirement savings withdrawn instantly from your paycheck and put into an employer-sponsored retirement account, such as a 401(k) or 403(b).
Step two: Decide what percentage of your take-home pay you would like to save for things other than retirement. This money can be used to build an emergency fund, pay cash for your next car or fund a vacation.
At this stage, you are simply picking a goal. Don't worry -- yet -- about how "realistic" the goal seems, or about how you will achieve it.
Step three: Log into your bank account to find out the total of how much you've spent over the past six months. Divide that number by six. It should give you a reasonable estimate of your current average monthly expenses.
Are those expenses less than your monthly take-home income?
If you answered "yes," calculate how much you are saving, and how it compares to your ideal savings rate.
If you answered "no," you've found a serious red flag. It's time to pare down.
Which expenses can you trim to reach your ideal rate? Can you cancel your cable subscription? Can you reduce the number of times you eat at restaurants each month?
You don't necessarily need to track every penny. Instead, brainstorm ways in which you could trim back your expenses. Add up how much those expenses will save you over the span of a month. Add this to your "savings" category.
Step four: Set up an automatic monthly transfer from your checking account to your savings account. Transfer as much as you can reasonably save.
Paula Pant blogs at AffordAnything.com about creating wealth and living life on your own terms. She's traveled to nearly 30 countries, owns five rental units and works for herself. Follow Paula on Twitter @affordanything