There's no magical formula for creating a budget that works for you, but these tips will help you get started.

To most people, budget means "cut back and do without," says Paul Richard, executive vice president of the National Center for Financial Education in San Diego. "It's not necessarily cutting back [as much as it's] spending in a way that gets the things you really need and want without ruining your finances forever," Richard says.

Just as we know that it's smarter to eat right than to diet, in money matters, families should avoid the bad vibes of budgeting. Forget the "b-word" and work on a plan where your savings zero in on financial goals, such as retirement, paying off debt or even buying a home entertainment center. Here are four steps to take:

1. Follow the money. Write down each day's expenditures for a month. Then, armed with this record, you can decide what you can live with and without. If your costs outstrip your earnings, and you aren't cutting debt or boosting savings, something has to go. You might have to say good-bye to the dry cleaner and do your own ironing in front of the television. If you can't make the tough decisions alone, get help. There's no stigma here. A credit counselor can put you and your family on a debt-reduction plan. Overcoming old spending habits will teach you new savings habits.

2. Fix those "fixed" expenses. You can't avoid paying for food, housing and utilities. But that doesn't mean you're powerless to trim those costs. Phone bills can be reined in by picking the right long-distance plan and paying only for services you need. If you call almost exclusively within your hometown, a bare-bones local calling plan may save as much as $200 a year. A regular insurance checkup should ensure you protect only those things you can't afford to replace. If you drive a beat-up clunker, for instance, you probably shouldn't pay for collision coverage since a similar replacement vehicle would set you back just a few hundred dollars -- less than you would pay to insure it.

3. Cut some money corners. Variable expenses include everything from grocery bills to entertainment. This is the area where fat is most easily trimmed, but where you may feel like a savings plan becomes a bit of a sacrifice. You can cut corners by clipping coupons and buying in bulk. Try generics and house brands. True, you'll likely save just pennies per purchase, but those grow to dimes and dollars when you stack up the dozens of items you buy each week.

   And there is always a way to stretch your spending cash. If the movie theater offers low-priced tickets one day a week or has cut-price matinees, take advantage of it. Likewise, go ahead and take the family out for pizza; just pick a night when the restaurant offers discounts.

4. Keep your eye on the finish line. Decide what you want to accomplish and rank the importance of those goals. Make your targets big-ticket items -- saving for college or retirement -- sprinkled with interim prizes like family vacations.

   Next, set up "pots" of money -- one for retirement, another for college and a third for general stuff like a new car or home improvements. To keep from spending the tuition pot on a car, you can physically separate these pots into different accounts.

   However, you shouldn't try to fill the pots one at a time. If you wait until after you've put the kids through college to start saving for retirement, you'll never accumulate enough to enjoy your golden years comfortably. Instead, try ladling money into all pots simultaneously. Then, tap each when needed.

   Supplement these pots whenever possible, and periodically review your progress to see if you need to change your mix of contributions. Even if all you can afford to fill is a pot used to pay down debts, the routine of saving -- by regularly setting aside money beyond what you need to live on -- is a good one. Once the debts are paid off, the savings habit will help you start to build a nest egg.