Money does not define you. The size of your paycheck and savings account doesn’t make you a better or worse, smarter or dumber, a more or less valuable person. What money can do is give you freedom. If you’ve ever been without it, you know what that lack of freedom feels like. If you’re lucky enough to have never felt that pinch, take steps now to ensure that the added expense of a child doesn’t pull you into a prison of unmanageable debt and paycheck-to-paycheck stress.

There are two aspects toward improving your financial situation: making more money, and spending less money. It’s really that simple. How you achieve that isn’t so simple, but we’ll try to break down common issues families have with their money and give you easy, manageable steps to resolve them.

The Ultimate Goal

Your ultimate goal will be to save 10% of your income every month. Part of that will stay in an emergency savings account, part will go to a college savings account, and part will go to a retirement savings account.

Once you reach this goal, you can start thinking about money as a long-term asset instead of something your job pays you to spend every month. The incredibly rich don’t think about annual income, they think about overall wealth. They don’t think about how to make more money but how to have more money. And that is the freedom that this “Ultimate Goal” will move you towards. Below are three larger steps to take, from easiest to hardest.

1. Track Income and Expenses

Create a spreadsheet that tracks monthly fixed expenses and monthly income. Also add in a field under expenses equal to 10% of post-tax income to account for the 10% savings goal. Once the budget is created, track every non-fixed expense as you make it, kind of like a money journal.

2. Spend Less

Look at your budget and see where your money is going. Identify what is “need to have,” what is “nice to have,” and what is “don’t need.” Immediately eliminate “don’t need” expenses. Make a judgment call on the “nice to haves.” “Need to haves,” like rent or mortgage, will stay, but you might be able to reduce those expenses rather than eliminate them completely. For example, cancel cable and get Netflix/Hulu/Amazon Prime instead. Reduce your phone and internet data spend. This alone could save $100-200 per month. Eating out is a big one, too. Eating out once per week instead of 2-3x could also save a couple hundred per month.

NOTE: Part of your expenses may be tied up in debt repayment. If you are repaying principal, that’s good. If you’re only making the minimum payments, you need to start paying down the actual debt ASAP. Otherwise, you’re just throwing money out the window.

3. Make More

This is the step most people focus on, but it’s actually the hardest to achieve. If it were easy, 15% of the country wouldn’t be living under the poverty line. The first step is to view yourself as a valuable asset. Lots of people don’t make as much as they could because they’re afraid to ask for it or demand it, or they see themselves as not worth the pay. Ask for a raise. Get a promotion or new job. Or, if you’re particularly enterprising, build your own sources of additional income.