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For the longest time, my wife and I didn't feel the need for a budget. But over the past year, for whatever reason, we've started looking into our spending. We were surprised by what we found -- and why budgeting became important to us.

Often times, people budget because they want to stop living paycheck to paycheck, or they want to save up for something big. But what I've found is that budgeting is just as important if you want to avoid one of the most dangerous pitfalls of life today: hedonic adaptation.

In short, my wife and I found out that we were eating out more and spending more on little trips to the store than we had been at any other point in time. Did these trips make us happier? Sometimes -- it was nice to not be forced into cooking dinner -- but often we were missing out on opportunities to spend time together as a family.

Here's the 60-minute guide to budgeting that helped us. It will hopefully help you, too.

Step 1: Break down your monthly spending (30 minutes)

First, my wife and I sat down and pulled up all of the accounts we usually pay for things with. This included credit cards, debit cards, checking accounts, and savings accounts. Then we went over our spending for the past three months and broke them all down into categories. While yours might be different, ours included:

  • Rent/Mortgage and Utilities (including phone plans)
  • Anything transportation related (including car insurance)
  • Other types of insurance (health, dental, life, etc.)
  • Food (both groceries and eating out)
  • Entertainment & Travel
  • Loans
  • ATM withdrawals
  • Miscellaneous

If you're both working together, and you have all of the information pulled up in front of you, you might be surprised by how quickly you can do this. It's a vital step, because without it, you have no idea where your money is really going every month.

Step 2: Read the following excerpts (5 minutes)

I've been lucky enough to be exposed to a wide variety of people in my life. One thing I believe in my heart thanks to these experiences is that money is only very weakly related to happiness. I think it is only beneficial to contentedness insomuch as it can be used as a tool to meet the most basic needs. After that, other factors are more important.

But don't my word for it: Take the next five minutes to see what professionals have already found out:

Step 3: Pare down those expenses (15 minutes)

The entire reason behind reading the excerpts above is that you need to prime your mind. Making the decision to cut out expenses can actually cause a physically painful reaction in your brain. The good news is that this pain is only short term in nature, and the readings should help you stay focused on the long-term goal of creating the budget -- and life -- you want.

So, go ahead, look at your spending and decide where you can make some cuts. Consider how much is "enough" for you and your family. Know that you might not get it right the first time, and that it's OK to tinker with this over time. Set some specific goals for spending.

My family specifically decided to tackle our food budget first. We reduced our money devoted to going out by 50%, and our grocery budget by 25%. Three months later, we've stayed true to these goals and haven't suffered one bit.

Step 4: Pull out those envelopes and read up on Dave Ramsey (10 minutes)

I have a colorful past with Dave Ramsey. We disagree on some pretty big things when it comes to investing. But I cannot deny my admiration for the incredibly simple and powerful steps he suggests for helping people get out of debt and spend within their means.

Foremost in my mind is Ramsey's Envelope System, which is awfully simple. If your budget for groceries is $400 per month, cash that amount out of your account, and put it in an envelope titled "Groceries." That's all the money you have each month to spend on groceries. The physical act of having to turn over cash (instead of a credit card) will make you much more mindful of how you're spending your money.

Step 5: Return and review monthly

OK, technically I'm cheating, here, by going beyond the promised 60 minutes. But I think it's vitally important to come back to your budget every month when you're first getting started. By doing this, you can make adjustments.

Maybe cutting out that latte meant you didn't meet up with friends during the week, and it really did affect your happiness. In that case, put it back in! Or maybe you think you can make cuts elsewhere to reach your "enough." Give it a try! This is a work in progress.

The key takeaway is that your budget shouldn't just be about money. It needs to be integrated with your own life philosophy and an understanding of what role -- if any -- spending money actually plays in helping you experience genuine contentment.