5 ways to build your budget: go from keeping up with the Joneses to keeping up with your bills.

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PRIOR TO NOVEMBER 2008, JAQUETTA Garrison and her family enjoyed an annual household income of $80,000 and lived a comfortable upper middleclass lifestyle in their hometown of Lithonia, Georgia. The only budgeting they did was in their "mental budget book," as Garrison says. But all that changed when her husband, Machion, lost his job as an engineering estimator at an IT company, bringing down their monthly income to $2,400. The couple had to immediately reduce costs, so they created a spreadsheet for their budget that they now stick to religiously.

The first thing they cut out was monthly luxuries. They eliminated their cleaning lady (a savings of $150), private school (a savings of $800), and eating out daily and on weekends (a savings of $700).

"We are now more conscious of what we do," says Garrison, who owns GNG Electrical Construction L.L.C. "With the economy the way it is, now is the time to streamline."

As the economy wallows in recession, it's important to follow the Garrisons' example and create a budget that's easy to follow. Deborah Smith Pegues, author of Financial Survival in Uncertain Times (Harvest House Publishers: $10.99), says individuals must confront the reality of their expenditures versus their income. Using the following tips will help you create a workable budget.

Track spending: "The first step in creating a budget is to track expenses. You need to know where your money goes and what you spend it on before you can begin setting up a budget," says Jeremy Vohwinkle, founder of Generation X Finance and financial expert at About. com. Sticking to a budget requires making small changes that are both realistic and manageable. For example, if you eat out every Friday night, try scaling back and eat out, say, once a month.

Assess your cash flow: List your income and expenses. Determine how much money is coming into your household and how much is going out. (Of course, you should have more coming in than going out.)Then, categorize your expenses as wants or needs. Food, shelter, and utilities are examples of needs. Though a car may be a need, a luxury vehicle is not and should not compromise other goals.

Use cash: Using cash instead of a credit card will make you stop and think twice about your purchases. It's a lot harder to part with cash in your hand than it is to swipe a card. You've heard it before, but it's worth repeating: If you don't have the cash to pay for something, don't buy it. "Using cash forces you to feel the immediate reality of the expenditure," says Pegues.

Prioritize spending: Shelter is a priority, but it shouldn't exceed 30% of your take-home pay. Food costs can be reduced if you cook at home and use coupons from newspapers or online. Use utilities conservatively. At least 10% of your net income should be saved or invested. Include entertainment in your budget.

Make use of the Internet: Monitoring personal finances has come a long way since the days of pencil and paper. Free Websites that offer information and tracking tools include Geezeo (www. geezeo.com) and Mint (www.mint.com).