That would be me.
I'm still trying to get my head around doing a budget - and that's actually going well. Right now I'm laying low, waiting for the end of the month. I've laid out my "guesstimate" budget in Excel, signed up for Mint.com (which tracks most of my purchases) and now I'm waiting to see how well I'm able to stick to my budget, and where I can cut back farther. I find I'm actually a little impatient - I want the end of the month to be here so I can see how I did, and get started on revision 2.
The very, very first thing I'm doing is building up a one month buffer in my Suncoast savings account. It earns a very small amount of interest (about a third of what the E*Trade savings earns) but it is attached to my checking account for overdraft protection. Once I have a month of money in that account, I can stop living paycheck to paycheck, and set up automatic withdraws to my E*trade savings and my investment accounts.
I'm convinced that the only way to get ahead is to NOT be behind. Living paycheck to paycheck, even if all your bills are paid on time, is being behind. It took me a while to get my head around that idea. I can't comfortably set up ANY automatic payments right now - bills, savings, investing or otherwise - because I am not 100% certain there's no way those payments won't accidentally bounce. So priority one is getting a full month's budget stashed in that Suncoast savings account.
Priority 2 is getting an "emergency" fund stashed in that E*Trade savings account. I'm thinking that $1000 should be enough to start with. That should cover any "average" major auto repair or bill. It's also a nice, round number. The trifecta is that it seems to be the number lots of financially literate people recommend to start out an emergency fund with.
Priority 3 is getting my credit cards paid off. Right now, that's down to about $1200.
I know, I know - it sure seems like that last one should be first. That makes the most sense to me. But then, my financial life is a train wreck, and the people out there that have been writing personal finance blogs for months and years say this is the order it has to be done in. At the risk of sounding Zen, financially speaking, I know that I know nothing. So we'll do it their way.
One thing has become very clear - I've been living stupidly. Well, that's not true. I've been living ignorantly. Now that I know better, if I continue to live that way, it would be living stupidly. What I mean is that until now, I've always thought I was making just barely enough to "make ends meet". I had no idea where my money was going, and I was always broke. It's sort of amazing to find out that I make enough to live comfortably, and still have a fair amount left over for savings.
That defines the difference between financial literacy and financial illiteracy. The financially illiterate has a hard time making ends meet no matter what their income level. The financially literate can find a way to live comfortably at a wide variety of income levels.