The only reason to have a budget is so that you make a conscience decision on how you want to spend your money. Without a budget, you might spend money in ways you do not intend.
In order to start a budget, you need to know how you are currently spending your money. Get a program such as Money or Quicken and enter all your spending. Do this often. You do not want to wait until you have many entries; you want to do a bit at a time, so that it never becomes a big job. These programs will let you print off reports on what you are spending your money on. You can then make a budget based on these reports. This will help you ensure you are spending your money on what you want to spend it on.
I put practically all my spending on my credit card. I also know exactly how much I can spend each month on credit and I keep an eye on my spending through Quicken. Credit card use can be handy and you can get rewards. The one I use all the time is the PC Master Card. I get 1% of my spending back as points that I can use to buy groceries. In the last 12 months, I got $300 worth of groceries free. However, I would never want to spend more than I can repay in a month as the interest rate is almost 25% per year.
When using credit cards, never think that you are not spending money. When I talk to others on credit card spending, this seems to be the main reason they spend too much on credit. It does not feel like you are spending money. This is the wrong attitude, and it can get you into trouble.
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