I build my budget by deciding how much I want to save per month first. Everything else gets divided between expenses afterwards. When I consciously decide how much to save first, then I’m less likely to eat into it. If I overspend in one area, such as dining out, then I debit another expense account (e.g. Gasoline) and credit Dining for the same amount. This keeps me “balanced” by effectively transfering funds dedicated from one area to another.

I update the books every night so I know where I am for the next month. This requires some neuroticism, but it works for my personality.

I’m weary of paying for things in advance as Roaring Twenties suggested. I’d rather keep the money in the bank and get some interest. In a way, that’s saving on the opportunity cost of the pre-payment. By using the excel spreadsheet, I can “put aside” the funds I need until I have to pay the bill. In the meantime, the cash does its work in the bank.

Interest rates are very low right now. I recommend the Charles Schwab High Yield Investor Savings Account, which offers a variable interest that is currently at 1.05% APY. You have to open a brokerage account at Schwab to get the Savings Account, but its worth it. However, keep in mind that you can only make 5 withdrawals per month (it’s really a money market account, despite it being called “savings”). However, most 1-year CDs can’t even match that, so I think it’s a great deal given the liquidity that you get.