Whenever financial planners give clients guidance about managing their personal finances, they always advise them to start by creating a budget. That’s because your budget is the road map that keeps you on course. If it is prepared properly, you should be able to look at it and immediately determine if you are meeting your financial goals in terms of savings or managing debt. And if you aren’t accomplishing your objectives, it should show you where you are deviating, and what spending activities need to be altered.

Those are the reasons you should create a budget; now here are the reasons most people don’t. A budget is a work in progress, meaning it changes as your financial situation changes. Each time you alter your life in some way like getting married or having children, your budget needs to be adjusted to reflect the differences in the outlay of cash that the particular situation brings with it. It also needs to be adjusted to reflect changes in savings and investment goals that result from your new lifestyle.

Even if you don’t make any drastic, life-altering changes in a given year, you still need to update your budget to reflect things like a pay increase/decrease or taking on additional debt, even something as seemingly insignificant as another credit card.

However, the single most important reason most people don’t stick to a budget is that they create one that is too complicated to follow. They may try to stick to it for a while, but eventually they become frustrated and give up.

“While many software programs exist to help with budget creation, it need not be rocket science. Paper and pen works just as well,” says consumer finance expert Ethan Ewing, President of Bills.com, a company whose mission is to teach the average consumer about managing their personal finances.

Ethan has graciously provided TH readers with a budget that’s a simple as “ABC”:

The ABC Budget

A = Add it up.

1. Begin by understanding what you have. Add up all monthly net household income (the amount left after taxes and other paycheck deductions such as health insurance and 401(k) contributions) to determine how much you have to spend.

2. Then categorize your ongoing monthly expenses into fixed expenses (like rent or mortgage payments), variable expenses that are “must-buys” (food, gas, medicine), savings, and finally, spending money (for unexpected expenses and entertainment). Add those up to understand your cost of living.

3. Subtract expenses from income. If that number (your bottom-line cash flow) is negative, or does not help you achieve your short- and long-term financial goals, do a “gut check” and find a way to either increase your income or reduce your expenses.

B = Budget, budget, budget.

1. If you’ve followed “A,” your budget is already halfway done.

2. At the beginning of the month map out how you will spend your money in the coming month. That’s a budget. Don’t forget to pay yourself first. Be sure to include the category for savings 00 no matter how small — and guard it fiercely.

3. In the process, evaluate expenses as a percentage of income. Divide each expense category by your income to calculate your expenses as a percentage of your income. A good rule of thumb is that expenses should break down as follows:

Home: 35%
Transportation: 15%
Debt: 15%
Savings: 10%
Other: 25%

4. Keep in mind these are only general rules of thumb and will vary by household. Someone who lives in an expensive housing market may have a higher percent for the home category, but a lower allocation for transportation. An individual who lives in a small town might have a lower home percent, but higher transportation expenses if s/he visits faraway parents often, for instance.

Whatever the number is for savings — 10 percent, more if possible, less if necessary — the key is to stick to a percent that works for you. With each check received (this works for self-employed/freelance/commission-based employees, too), set aside a predetermined percentage, based on your budget, for savings and investment.

C = Cash is king.

1. If you’re among the Americans carrying an average of 14 or more credit cards — and using them — put away the plastic.

2. Cash out your spending money in cold, hard bills, and don’t touch the plastic for discretionary expenses like clothing, movies, coffee, dining out, or happy hour.

3. Most importantly, never charge more than you can pay off at the end of each month.

Creating a simple, easy to follow plan like this one that is customized to your individual financial situation will make it much easier to stick to. If you would like some more information Bills.com has developed, with its parent company, Freedom Financial Network, check out a 16-page guide entitled Debt Freedom: Budgeting & Financial Tools for Today’s Consumer. The guide provides advice on understanding cash flow and debt, defining a budget/spending plan, and setting goals to attain financial freedom. It’s a must-read for anyone who’s trying to get their financial house in order.