Likewise, many people are unconscious of their spending until they're forced to write it down. Suddenly, the impact of the \$3 latte or late-afternoon snack run becomes clear.

"It's not just a few dollars. It's \$3 a day times 365 days a year," or more than \$1,000, Wood said. "It adds up."

## Calculate your DDI

If you're going to use this budget, I'd recommend you be vigilant about identifying and saving for less-than-monthly expenses, such as property tax payments, household maintenance, big car repair bills, vacations and holidays. You should figure out how much you're likely to need on an annual basis, divide by the number of paychecks you get and set up automatic transfers into savings to make sure you're covered. (Also, you'll want to count those figures into your monthly expenses to come up with the right DDI.)

Here's how to calculate yours:

• Multiply your take-home pay by the number of pay periods you have in a year, then divide by 12. Example: biweekly \$1,500 take-home pay times 26 divided by 12 = \$3,250 monthly net income.
• List your monthly fixed expenses. Example: mortgage/rent, \$800; day care, \$350; savings, \$200; car/home insurance, \$169; car payment, \$150; life insurance, \$50; home maintenance, \$50; car repairs, \$25.
• List your monthly semifixed expenses. Example: cable/phone, \$100; heating bill, \$100; electric bill, \$50.
• Add your total fixed and semifixed expenses. Example: \$1,794 fixed plus \$250 semifixed equals \$2,044.
• Subtract your expenses from your monthly net income. Example: Monthly net income of \$3,250 minus expenses of \$2,044 equals monthly disposable income of \$1,206.
• Multiply your monthly disposable income by 12 and divide by 365 to get your daily disposable income. Example: \$1,206 multiplied by 12 and divided by 365 equals \$39.65.

Of course, the advice to track your spending is nothing new; it's standard personal-finance advice for those creating budgets. Wood's innovation is in giving people a target amount they can spend each day, based on their income and bills.

If your bills consume much or all of your income, you may find this program tough to follow. In that case, I'd recommend looking at ways to reduce your big expenses to get your overhead under control.

But if your basic expenses are manageable and you're looking for a way to get the rest of your spending under control, this simple approach is a good one to try.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.