Money matters to all of us, whether we have a little bit or a lot. Managing your money should be a top priority; otherwise, you’re liable to find yourself with an empty bank account at the end of the month—or living paycheck-to-paycheck. The best way to ensure financial security is to create a budget.

Creating a budget might feel like an overwhelming task, but it’s really quite simple. Keep in mind that a budget doesn’t tell you where your money went—it puts you in control by allowing you to decide where your money will go! The following steps will help you on your path to financial security.

1. Determine your net income. Calculate your take-home pay after taxes; remember to subtract all deductions, including 401 (k) plans, flexible spending account contributions, health and life insurance, etc. Don’t forget to include additional sources of income such as alimony, child support, rental income, cash gifts, online sales, freelance income, interest and dividends.
2. Calculate your expenses. Now that you’ve figured out what you’re making, it’s time to calculate what you’re spending. Start out by listing all your fixed expenses (rent or mortgage, utilities, car payments, etc.). Next, move on to irregular recurring expenses, such as insurance or quarterly payments. Finally, determine your variable expenses—ones that change from month to month. Food, gas, and entertainment fall under this category. Add up all your expenses for the last six to 12 months and then divide by that number to get an accurate picture of your monthly average.
3. Set financial goals. After subtracting expenses from income, you’ll have a pretty good idea of your overall financial picture. If you’re ending up with more income than expenses every month, your goals might involve reducing debt or building up your savings. But if you are spending more than you’re making, you’ll need to figure out areas in which to cut back. Scrutinize your spending habits carefully; there are usually seemingly-insignificant expenses that really add up over time—such as a daily cup of coffee or lunch out. Once you’ve figured out where your money is going, start cutting out as many unnecessary expenses as possible. Your goal should be to come out ahead every month. If you’re struggling to get into the black, look for ways to increase or supplement your income.
4. Track your progress. Now that you’ve determined how much you’re making, what you’re spending, and established some short- and long-term financial goals, track your progress by recording all your income and expenses. You can create a spreadsheet (Excel offers some excellent templates), utilize an online budgeting tool, download an app, or go old-school and write everything down in a paper ledger. It doesn’t matter how you track your progress as long as you do so consistently. Make adjustments as needed to ensure you stick to your budget and meet your goals.

Follow these four steps and you’ll soon be in control of your finances!