Living within your means is important. This means that you need to spend less money than you make. If your financial life isn’t where you want it to be, make a plan to reduce your debt. One key consideration to keep in mind as you create your plan is to keep track of your spending.

It’s hard to reduce your spending if you don’t have a good idea of where your money goes. Keep track of your typical monthly expenses for three months to figure out where your money is going. Compare your average monthly expenses to your monthly income.

If you have a surplus, this is the amount you can apply each month to paying down debt and building a savings. If you have a shortfall, you’ll need to examine your expenses more closely to see what you can potentially cut back, or cut out. Being consistent and having self-discipline with your spending and saving habits will eventually lead you to obtain all your financial goals.