How to Create a Budget for Living Expenses
While there are many software programs and websites to help create and maintain a budget, the easiest way to start is with a paper and pencil. Make a list of every regularly occurring living expense and its amount for each month including rent or mortgage payments, electricity, natural gas or propane, cable, telephone, Internet access, and cell phones. Add groceries, laundry, pet care, and a minimum clothing allowance to this list. These are your living expenses.
Make a second column of monthly debts not related to living - car payment, insurance, credit card debt, student loan payments, and any other loans. These are regular recurring expenses not required for day-to-day living.
Finally, make a third column of all of the household income. If you are a single person working one job with no investments, the list will be very short. Compare the total of the first column plus second column to the total of the third column. Hopefully, the third column will be greater than the total of the first two - that's a great start.