Monthly Income

• A budget worksheet includes an area for income. Calculate your total monthly income to get an idea of how much money you have coming in. For a personal budget plan, this can include wages from a job, child support, alimony, monetary gifts and income from a second job or contract work.
  
  

Monthly Expenses

• Create two separate expense categories on the budget planning worksheet. In one section, list your fixed expenses, which are expenses you pay each month to operate. These include rent or mortgage; utility payments for heat, water and Internet service; and car expense. Fixed expenses are often the same amount each month. The other section is for variable and personal expenses, which vary each month, in terms of both what is purchased and the amounts spent. For instance, clothing or holiday gifts may be needed one month, but not the next. Create an expense list for both categories, so you know how much you are spending.
  
  

Financial Standing

• Subtract your total spending for a single month from your total earnings to get an idea of your financial standing. If you are spending more than you are earning, you are developing debt. Use this information to set spending targets in a budget, reducing spending in some categories as needed until you reach a positive cash flow position. If your budget worksheet reveals you are already spending less than you make, you should put money into a savings account. Having additional savings left over each month gives you financial freedom. Use this information to set your financial goals. For instance, you could allocate additional funds left over each month to reach a goal: paying off debt, accumulating a down payment for a house or funding a child's education.
  
  

Keep a Spending Log

• Keep a daily or weekly spending log to control spending, particularly if you find you are spending more on variable or personal expenses each month than you had planned for in your budget. Write down the day and time of day you purchase something outside your budget and how much it costs. Record your feelings as well. Use this as a reference each time you want to purchase something; refer to the emotion you left during a previous purchase. It might help you stay on track.