An important step toward realizing your financial goals is creating a realistic budget.

A budget is simply a spending plan that is based on your expenses and income. A written plan helps you stay on track, day to day and month to month, for meeting your financial goals.

For most of us, debt is a part of life. Mortgages, student loans, car and credit card payments all affect how we spend and save our money. Maintaining a spending plan can't eliminate debt overnight, but it will help to minimize unnecessary debt while building healthy financial habits.

How you spend your money says a great deal about your priorities and how prepared you are to achieve your financial goals. Some spending, even if it's repaying a debt, can be considered an investment – even if it's not going toward retirement or saving for a nice home. One example could be repaying higher education loans – for many college graduates, every dollar spent on tuition has been returned many times in the form of higher wages. So some spending, and even debt, can be a smart investment in your future.

On the other hand, we routinely spend money on things without realizing the real cost. This is especially true of everyday expenses like purchasing food on the go. Just think - if you were to have three restaurant dinners out per week that cost $35 each, these meals would cost nearly $5,500 per year. A $10 lunch at the office would cost another $2,600 per year. A nice cup of coffee each day could add up to over $1,000 per year. So that's a total of over $9,000 per year of after-tax income spent on convenience eating – much more than preparing food at home.

The idea here is not that you should never go out to dinner, but that unplanned purchases can add up in ways you might not expect. Creating a budget helps you focus your spending on what really matters to you. By budgeting your money, you control your spending habits, rather than letting your spending habits control you.

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