And what is the prize for completing this exercise? You get to do it again next month.
I believe that monthly budgeting is an outdated concept.
Very few of us are paid on a monthly basis. What's more, households have expenses that crop up every three months or every six months that need to be addressed within the same framework, regardless of what month it is.
The key to getting a grasp on your cash flow is to understand what it takes to run your household for 30 days. Individuals need to know what their regular expenses are each month, such as the mortgage/rent, car payments, student loan payments and utilities.
You've got to know what this number is and automate payments as much as possible. These automatic payments change rarely, so it will provide you with a baseline awareness of these expenses.
(Read more: 5 tips for year-end tax planning)
The next step is to check in on your variable expenses on a weekly basis. It may sound painful, but it's necessary, and once you get into the habit, it will take only about 20 minutes.
The weekly check is needed because it will help you remember a recent online purchase or what you bought at the drugstore, and it will help you develop a greater awareness of what you are actually spending on variable expenses, such as groceries, clothes, gifts, dining out, etc.
You'll also gain a much greater awareness of what kinds of spending make you feel content when you look at them at the end of the week and where, in retrospect, you wish you had made different choices.
(Read more: Tips for holiday spending)
Automate the process of saving for future goals. Chances are, you already do this pretty effectively if you have a retirement plan at work. These goals can include putting money aside for the annual family vacation, replacing your car or buying a second home.
The money is taken out before you even see it, and that simple process puts that money to work for you automatically.
Determine how much you would like to save, and build in automatic transfers from your paycheck or your checking account to another account. Don't let money hang around your checking account looking useful if it really is designated for another purpose.