I'm going to smash every finance gurus' sacred cow when I say this but I believe that budgeting in the traditional sense is not a good idea. Let me explain. I think that traditional budgeting, the I'll only spend this much on food, this much on entertainment, budgeting gives too much allowance for wasting money. Let me explain, suppose that I decide to spend $200 on food this month. On the 25th of the month I realize that I've done really well and have only spent $150. It's then really easy to justify spending that additional $50 on luxury food or whatever else rather then sharing it with others in need. It doesn't take into account the fact that you may have stocked up on groceries on the last day of the previous month and "blew" your budget by $50.

I think that a better alternative is to track how much you're spending on different areas just as with budgeting but strive to make each category lower each month. With everything that is left over, either give it away, pay off debts or save. When you follow this method there is no allowance for wasting the extra money that you saved. There is also less emphasis on rationing out each month's money and more freedom to get good deals and stock up. There is more focus on simply trying to spend what you need rather than trying to stay within artificial boundaries. It should challenge you to spend less.

If you're particularly tight on money you may want to stick to old fashioned budgeting or create some hybrid version. The reason for this is that you don't want to accidentally run out of money for food because you paid off all of your phone bills. The purpose of the budgeting is then to make sure that you have enough money for the important things. Ultimately, money management decisions come down to what works for you. Only experience will tell you that but I hope that this can point you in the right direction.