Things You'll Need:
- Check book(s)
- Bank statements,
- Pay stubs and/or W4s
- Credit card statements
- Bills
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Step 1
Choose the medium with which you are most comfortable. If you are intimidated by computers and can barely manage your email, a sophisticated software package is not for you. Pencil and paper work just fine.
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Step 2
Sort the paperwork. Your main categories are income, assets and expenditures. Put aside the statements of assets. A budget should include only your income and expenses, as you should be living within your means, spending no more than what you make.
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Step 3
List and total your expense according to categories. Include: tithing or charitable contributions, rent or mortgage, utilities, cell phone, cable, transportation, health care, life insurance, personal, child care, membership fees, school costs, debt payments, entertainment and vacation, gifts and miscellaneous. List all household expenses that must be paid out of household income.
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Step 4
Make provisions for replacing cars, furniture and other large-ticket items. Savings and investments should also be on your household budget. Estimate the cost of the replacement items and divide by the remaining life of that item. For instance, if you will need a new car in approximately two years, and you want to buy a used car in the $10,000 range, you will need to save about $416 per month.
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Step 5
List and total your income. Be sure to include investment income or a second job. If you have a salaried position, this is easy: just list your take-home pay. If you work on commission or are self-employed, your income might vary quite a bit. Simply estimate your annual total and divide by 12 for your monthly income.
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Step 6
Set up your budget for a monthly basis. Regardless of your pay periods, most bills (utilities, credit cards, loans, rent) are issued monthly. Make sure that your expenses are less than or equal to your income. Make adjustments as needed. Create your monthly spending plan using the expense categories you allocated. Simply list your monthly income followed by planned expenses. Continue to look for ways to cut down on expenses and increase income if needed.
