SALT LAKE CITY — Whether money is overflowing or barely trickling into your hands, each dollar holds massive power only fully realized through proper budgeting. Although often viewed as the dirty word of money-talk, budgeting is the integral linchpin to financial wellness. No matter what your income, a spending plan — that’s all “budget” means, anyway — leads you to greater stability and a more fulfilling lifestyle.

Based on the national 2009 survey "Financial Capability in the United States," commissioned by the FINRA Investor Education Foundation, Americans were asked how satisfied they were with their current financial state. On a scale of 1 to 10 (1 being not at all satisfied and 10 extremely satisfied), Americans averaged roughly 5.55. Those in the $75,000-plus income bracket averaged 6.54, less than two points higher than the 4.71 average of those in the less-than $25,000 or poverty bracket.

Why such lukewarm contentment with personal finances, despite varying incomes? The following data sheds some light: When asked how easy or difficult it was to cover their expenses and pay their bills each month, 49 percent responded with either “somewhat difficult” or “very difficult.”

More money never fixes money problems — budgets fix money problems. Each person needs one if he or she plans to thrive, not merely limp along from paycheck to paycheck. Here are the steps to making a budget work for you.

1. Decide how you want to spend your money

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A common misconception about budgets is there’s no room for luxury taste or splurging. Wrong. It all comes back to what you ultimately value. Budgeting begins with some introspection. You decide what matters to you and the budget will help you work toward fulfilling it — be it yearly vacations, paying down debt or weekly outings to the movies. The key is, it requires pro-active planning, not in-the-moment decision-making. Think of your budget like a workout regimen, or the menu to a healthier diet. It’s the constructive framework propelling you forward with purpose, and shaping your spending decisions.

2. Prioritize your dollars

Deciding your personal priorities ahead of time is half the battle of budgeting. Begin with this simple question: “What do I need this money to do before the next time I’m paid?” Several days before the new month starts, assign a designated amount of money to each priority until you’ve assigned your dollars down to zero — a method cleverly known as “zero-based budgeting." Budgeting only what you’ve already earned, using real numbers, provides the most accurate picture of your financial situation. Committing each dollar to a specific purpose ahead of time decreases unnecessary spending and funnels those dollars toward more fulfilling purchases. If it feels tight and you can’t cover your basic needs with the money you have on hand right now, you’ve discovered something: It’s time to figure out where that money is going.

3. Monitor your spending

Tracking your spending as you go forward is paramount to building financial wellness and making the budget work. Recording each dollar that leaves your hands brings to light leaky spending you weren’t even aware of —making it that much easier to trim the fat and focus your money on what you really value. For beginners, it’s smart to stay on top of it every day, at least for the first few months. Once it’s ingrained, a half hour each week is all you need to account for spending.

4. Track your money in detail

Many claim to just keep track of spending in their heads, but this never gives accurate feedback. In "Making the Most of Your Money Now," Jane Bryant Quinn said, “Write down where your money went last month. Don’t do it from memory. ... Compare the result with your take-home pay. Odds are that you can’t account for all the money. In fact, there will probably be a significant gap between what you earned and what you remember spending.” A loose, mental reckoning of your spending will never give the same results as real numbers staring back at you.

The more regular, hard data you collect about your spending habits, the more true awareness you build. No more burying your head in the sand. Armed with exact information, you can begin a more precise attack on unnecessary spending and stop money from running through your fingers like a sieve.

5. Look ahead

Lastly, plan for the future today, and be flexible. This means setting money aside for irregular, known expenses such as property taxes, car registration or Christmas. Break up these large, infrequent bills into smaller chunks, and contribute to the funds on a monthly basis. For instance, if you plan on spending $1,200 on Christmas, set aside $100 each month for 12 months. Treating large, irregular purchases this way levels out your spending and helps you gain traction over the long run.

6. Prepare for the unknown

Be sure to plan for the unplanned as well. According to a 2011 Harris Interactive poll conducted for the National Foundation for Credit Counceling, 33 percent of Americans do not have any savings, besides retirement funds. You don’t have to live on the edge of financial crisis. Regularly set money aside for unexpected expenses such as car repairs or medical emergencies. Although you don’t know how much an emergency will cost until it happens, it’s much wiser to be prepared with some money rather than nothing at all. Pick an amount and adjust it down the road, if necessary.

Keep in mind, you will overspend in a category almost every month. This is not failing. This is learning, and it’s much better to overspend in a budget category than overdraft your entire account. See the difference? Plan. Spend. Track. Adjust. Budgeting is a powerful process and the key to helping your finances thrive.

Jesse Mecham is a former CPA and founder of the financial software company YouNeedaBudget.com. Based on four fail-safe rules, Jesse's budgeting program helps people break the paycheck to paycheck cycle, get out of debt and save more money faster.

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