One essential tool for anyone recovering from bankruptcy or trying to build stronger finances is a budget. It’s not a sexy word (though budgets have become slightly hipper since the recession spurred an upshot in prideful frugality), but it’s part of life (or should be) for anyone trying to dig out or stay out of debt.

But where can a person start to build a budget that can offer lasting financial guidance? Here are some options.

Go Digital with Your Budgeting Tools

• Automated online budgeting: Web sites like Mint.com offer a bevy of free online budgeting tools. In order to use them, you enter your bank and account information and the web site provides organization, categorization and tracking services. This may be a great tool for people who want their budgeting to be as easy and hands-free as possible.
• More interactive online budgeting: As this budget commentary from the New York Times points out, though, some consumers may be wary about entering so much personal information on a third party web site. After all, the more you spread your sensitive information, the more likely you are to have an identity thief steal them, right? If you’re interested in a less intrusive online tool, check out the new Doughhound.com, which does not require any account information to start an account. The downside of this system is that you have to enter transaction and sorting information yourself, which will take more time.
• Ordinary spreadsheets: Alternately, you can keep your budget information to yourself entirely by creating a spreadsheet on your personal computer. The disadvantage here is that you’d have to do all the setup work, but if you’re handy with Excel, you could create something to exactly suit your needs.

The Key of Successful Budgeting: Do It

Whatever your budgetary poison, though, the most important thing about creating and sticking with a budget is to actually do it. That means:

• Track your spending: For one month, figure out exactly what you spend.
• Know your income: If you’ve got multiple sources of income in your household, make sure you take them all into account when figuring out this side of the equation.
• Sort your expenses: Once you see what you spend, figure out where and why you spend it.
• Cut your expenses: The next step is to find places where you could drop less cash than you currently do (especially if your monthly expenditures outpace your income).
• Set some goals: Finally, make sure you include in your budget categories for savings and retirement accounts. Once you’ve got the basics, you can add other savings piles: for vacations, major purchases and other rewards.
• Don’t get lax. A budget, like a bankruptcy filing, is not a one-time fix. Both require you to continually renew your commitment to financial responsibility in order to meaningfully help you eliminate your debt in the long term.

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