You just got your W-2 and you're feeling a bit discouraged. Okay, you didn't make a Bill-Gates-size fortune last year but you didn't do too badly, either. Problem is, you're not sure where all the money went. Surely your bills can't be  that high . . . can they? Your credit card balance has ballooned to frightening levels and, once again, you've failed to save a cent toward retirement. Tax Man.

Budgets may be painful, but they are a practical pathway to helping you realize your dreams.  Creating one might even help you get the new car, vacation, or flat screen TV sooner! You can't get financial freedom unless you organize your cash flow—understanding that a wish list is as much a priority as recording your purchases.

If you don't control your money, it will control you.  It will cause strife in your marriage, crush you under a load of debt, and force you to toil your life—and maybe your health—away to pay off that mountain of bills.

Once you get serious about getting a handle on your finances, the process is surprisingly easy to follow, as shown in the list below:

     · Don't call it a  budget. Call it a  cash flow statement. Like the word  diet, "budget" has gotten a bad rap. It suggests deprivation. So change your terminology, a cash flow statement is actually empowering. "It suggests that your life can be run like a business. and it can be: a profitable and deeply rewarding business. Your cash flow statement is nothing more than a tool for helping you get what you really want out of life—your dream home or a family trip to Europe or an early retirement—rather than watching your money trickle away one $7 latte at a time."

     · Starting in February, write down every cent you spend for the next month. That's right. Record every gallon of milk, every tank of gas, every daycare check, every sweater or book or DVD that you "impulse buy."

      · Before you add it all up, arrange your purchases by category. To made your job easier create a Cash Flow Statement forum that should have columns for you and your spouse and it should cover pretty much everything. It also reminds you about annual expenditures like property tax, holiday gifts, vacations, and so forth; you just divide the annual amount by 12 and enter the figure for the month.

      · Now, calculate your total expenses and subtract them from your monthly income. If it turns out you are living within your means but still having trouble saving, the Cash Flow Statement form will show you where it's hiding. If you're spending more than you're earning—a very common situation, by the way—it will tell you why.

     · Figure out what you can cut without causing too much pain. It's amazing how much money people spend almost unconsciously. For instance, it's not hard at all to spend $50 a week or more on lunches. If both you and your spouse buy your lunch daily, that adds up to $400 a month—or $4,800 a year!  Believe me, most people have no idea how much money they waste until they sit down and make out a budget."

      · Stop neglecting the retirement issue. It's true that retirement is a complicated subject and everyone's needs are different. Certainly, helping you figure out how much you're going to need is far beyond the scope of this article.

      · Take the sting out of saving by creating a "wish list." While emphasizing planning for tomorrow, it is just as fervently in enjoying some money today. That's why she insists that you sit down with your family and come up with a wish list. This is your "fun money." Maybe you want a cruise to the Bahamas, while your spouse wants hardwood flooring for the house. Neither of these goals may be achieved this year, but that's okay.

Here's where the different "money attitudes divides people into Spenders, Savers, Givers, and Builders—really assert themselves. Savers may actually be reluctant to create a wish list because it seems too 'frivolous,' while Spenders may chafe at giving up the 'high' they get from spontaneous shopping sprees.

Diane McCurdy, author of How Much Is Enough? Balancing Today's Needs with Tomorrow's Retirement Goals.  For information call:  800-225-5945.