Maybe you look at your bank account at the end of every month and feel a little twinge of despair. After all is said and done, it either hasn’t changed, or the numbers have fallen. This is a common scenario, as many North Americans live paycheck to paycheck, simply not knowing how to save money each month and thinking themselves unable to do so.

It’s easier than you think, though. Just follow these steps, and you can be on your way to saving money each month.

The first thing you need to do is calculate your mandatory expenses. Figure how much your bills are for rent, utilities, food, and transportation, in order of importance. There are ways to cut down on all of the above, but for now, assume these are fixed costs. If you’re making more than this amount, then you’ll be able to save money. If you aren’t, you may want to consider switching jobs or reducing your mandatory expenses by negotiating a rent decrease, moving to a cheaper apartment, negotiating fees with your utility company, learning to cook yourself and cook meals in bulk, and so on.

Next, you should figure out the non-mandatory expenses. These include clothing, entertainment (cable TV is not mandatory), and other things you don’t absolutely need in order to survive in the world. Use your bills from last month, or keep track of your spending for a month to estimate how much you spend monthly.

Any regular “luxury” items like getting a cup of coffee every morning on the way to work, a new TV every few years, or a vacation should be the final priority. If you don’t get a new TV, you’ll be just fine, but if you run out of serviceable clothes or can’t make the rent, you won’t be.

Once you have all of this written down, you have a complete mental picture of what you really earn and spend, not what you think you do… and sometimes these numbers can differ enormously. If you have trouble or don’t know what numbers to input, keep track of every dollar you spend each month by making yourself write the information down on a notepad or keep the receipt after every transaction. You might be in for a shock, though!

Finally, you can decide what to cut down on. Your first priority is obviously to ensure that your income is enough to cover mandatory expenses. If it isn’t right now, cut down mandatory expenses or increase your income as soon as possible. Once that’s done, you can focus on the next priority, and then the luxury items.

Savings techniques such as wise shopping online, coupons, and budgeting can really help you cut down on what you spend, and they only take a little time out of your day. Consider doing one or more of the above if you can’t quite seem to store away money each month.

It’s very possible to finish a month with money left over, as long as you know just what you’re spending where.