It's a sad fact that most of us don't have as much money as we'd like to spend on things we really want. However, spending your hard earned cash on credit card charges and bank overdraft fees is just plain madness so some caution is needed and, more to the point, some planning.

When I was barely earning enough to cover my living expenses, I used to watch my bank balance like a hawk and I used an Excel spreadsheet to calculate my spending for each month.

This is how it looked:

Column A was a list of all my outgoings. I started with the ones which were fixed (if only until the next price rise) e.g. the mortgage, insurances, pension contributions, etc. Then I estimated the non-fixed expenses such as utility bills, petrol and groceries and listed those. Lastly, I wrote down the less essential stuff such as entertainment, birthday presents and new clothes.

Across the top of my spreadsheet was each month of the year so under each month, I filled in what outgoing was due. For example, the mortgage had to be paid every month but the electricity bill only came every three months and the road tax and insurance for my car were due only once a year but both at the same time.

All this left me with a lot of peaks and troughs - plenty of money left at the end of one month but, oh dear, two months later, a huge deficit. When I had a surplus, it was hard to put it aside for the lean months so I decided the expenditure needed smoothing out. The way to do that was to see how many of the outgoings I could pay monthly to even it all out and the answer was - nearly everything.

I discovered that I could sign up for budget plans for gas and electricity whereby the providing company looked at past usage, added the four quarters of the year together, divided by twelve and came up with a monthly amount. Both my household and vehicle insurance companies would accept monthly payments. I could buy stamps from the post office for telephone, road tax and TV licence. Ultimately, I could pay for all the essentials each month, so with the peaks and troughs ironed out, I had the same income each month, the same amount going out and thus, the same balance.

I allocated a fixed amount of the balance towards petrol and groceries and this left the amount I was allowed for my personal expenditure. It wasn