Things You'll Need

Instructions

1

Gather all your income and expense records. Make two piles separating the income documentation from the expenses.
2

Make an “Income” list of all your income including wages, tips, rentals, interest, child support and pensions. Write down the name and the amount. Using a calculator, add up your total income and write this figure down at the bottom of the list.
3

Create two expense piles: fixed expenses and variable expenses. Fixed expenses remain the same, such as loan payments, insurance premiums and some utility bills. Variable expenses often differ, such as food, gas, entertainment and vacations.
4

Generate an “Expense” list with the name and amounts. Start with all your fixed expenses. Beneath this, list the most important variable expenses first -- the basic needs expenses including groceries, transportation and medical care. End the list with expenses you could do without in months where your total income is less than your expenses.
5

Total your fixed and variable expenses. Subtract this amount from your total income. Your objective is to maintain an income greater than all your expenses.
6

Plan next month’s budget using your total income amount and deciding if any changes are needed. Cover the fixed expenses and needed variable expenses first. Divide the remainder among the other variable expenses. If you have excessive money, either set up a savings account or give yourself a reward, such as a night out or a special purchase.