If you have room to grow in terms of maturity about money, then you have to embrace the concept of managing the flow of it. Wanting to avoid all possible expenses and save as much as you can is a great ideal, but realistically you have to remember that money comes and goes. Being mindful of the stream of money throughout your life is the key to keeping any of it.

Budgeting does need to be difficult. The simpler you make it, the less time it takes to make a habit of. When spending, think cash first, debit second and credit third. Applying this hierarchy of spending will help you to start curtailing things you really don’t need to spend money on, better track your available money now and avoid interest rates and overdrafts.

While you always want to be mindful of your present financial circumstances, keep an eye on the future. Think about your personal physical health. Review your car maintenance records. Use an online calculator to estimate your taxes due next April.

It only takes a few moments of honesty and clear thinking to estimate both the cost and probable date of your next big “sudden” expense. Set a secondary bank account or even a jar or piggy bank to start saving for it. Even if you don’t feel right not that its even realistic to save that amount of money in that time frame, saving anything towards it will minimize the blow. You might even discover a solution in order to keep the money you save.

If you want to be able to smooth out all your irregular or miscellaneous expenses, assemble all paperwork and information you have from the previous 12 months. This would include bills, receipts and bank statements. If need be, just print out you debit and card transactions from the previous year. Doing this will let you figure out the four things a budget really needs.

The first thing you want to establish from all this information is how much your personal “overhead” is for the business of regular life. Calculate how much you spend in an average month on insurance, rent or mortgage, food, utilities and other monthly expenses. Also keep an eye for seasonal variations in utilities depending on your home’s heating and cooling needs. This can prevent surprise power bills from knocking your bank account.

Once you have your overhead computed and tended to, the second thing you want to figure out is the miscellaneous and irregular expenses that vary. This is usually going to include medical bills, insurance premiums, car maintenance, vacations and home repairs. Total it all together and figure out what percentage of your money you already spend on it. Now you know what percentage of your future income to leave alone for these expenditures.

The third priority covers savings and debt. This one can get complicated. You want to pay down the highest interest rate debts as soon as you can, although a lot of people find more steady success in paying down the smallest debts first and tackling larger ones in order of increasing size. You also need to first save an emergency fund of six months at least, then start long-term investing.

Finally, you want money leftover for you, for now. This is your spending money, to eat out, to see movies, to take that next vacation. At first, there might not be many dollars in this priority, but this is your motivation to get the first three done so that more of your money flow lands in your pocket.

Applying this four step process is the backbone of budgeting. Following these steps allows you to master the flow of money through your life and start making minor tweaks that leave more of the dollars coming in to stick around a while.