Yes, when budgeting is done properly, it actually relieves stress, even though the common perception is just the opposite. It doesn't matter how little or how much money you make, or how upside down you are in your spending - taking control of your finances is always less stressful than blindly hoping that you will be able to get through until the next payday.
Budgeting doesn't mean depriving yourself. In fact, when done right, you can actually spend money without feeling guilty, knowing that you have made a conscious choice to make that purchase and that the money is there to cover it.
The first step is to know where your money is going. I would highly recommend that you keep a careful record for the next 30 days of where every dollar comes from and where it is spent, without trying to change anything. There are several ways to do that: simply write down everything down with a brief description of where it came from and where it went; set up an Excel spreadsheet with columns for income and different types of spending (rent/mortgage, utilities, groceries, car payment, eating out, etc.) and record everything you take in and everything you spend, including credit card purchases; or use one of the free online programs like Mint.
You will find that there are some expenses that tend to be the same each month (rent/mortgage, car payment, etc.) and others that you have more control over (groceries, eating out, entertainment, etc.). You will probably also find some areas where you are spending a lot more than you expected, such as stopping at Starbucks every day or buying your lunch on workdays.
Now comes the fun part - deciding what your priorities are. We all use a great digital program called You Need a Budget (YNAB) that is life-changing. They offer a free 35-day trial, lots of information and free online seminars, and wonderful customer support. For more information on YNAB, check out this post. The big difference between YNAB and most other budgeting programs is that most programs track where you spent your money, and YNAB helps you plan where to spend every dollar as soon as you receive it. I would highly suggest signing up for their free trial and actively using it, taking full use of their training videos and seminars. This is great information that gives you what you need to put together your own system even if you decide not to purchase their program. (We are not affiliated with YNAB - we just love their program.)
I found that the most important part of budgeting is to think about where you are going to spend each dollar before you spend it. It is very similar to the Weight Watcher's point system - just knowing that you have to write it down (or keep track in your head) is enough to make you pause and think twice.
One of the most important areas that you have control over is what you eat and where you eat it. If you have a busy schedule like most of us do, don't have good cooking skills, and/or don't have the funds or access to the healthiest foods, it may seem like there isn't much you can do to make changes there. Two of the most effective ways to save money are to cook at home, and don't waste food. We are doing two more posts in this series that can help you without becoming overwhelming.
Check back on Wednesday for the next post in the series, "Cooking at Home".