For example, our budget covers January through December of 2009 now. But by the end of January, we'll be looking at the period from February 2009 through January 2010.

Whenever we notice a crush of expenses coming up, such as in April, we start setting money aside as much as a year in advance. For example, if we know we'll have to spend an extra $3,000 one month, we start putting away $250 a month a year earlier.

Think of it as a "layaway" plan, except we're paying ourselves. We deposit the money in an interest-paying federally insured online savings account and transfer it to our checking account when the bills finally arrive.

We put the same idea to work when planning for larger expenses that occur only once every few years. Anticipating we may need a new car in five years, for example, we've begun to put money away for it.

To work, this budgeting must be based on realistic estimates of future expenses. To make these realistic estimates, we need to know what our current expenses are.

All this brings me back to the point I've been making for years and emphasizing recently during these difficult times: Keeping detailed track of our expenses is the essential first step to get our personal finances under control.

Anticipating expenses also lets us spot opportunities for savings. Knowing when insurance premiums come due, for example, gives me time to shop around for the best coverage options and rates. I never renew an insurance policy without first checking competitors' quotes.