After looking at all of your expenses, separate them into categories and set a budget for each. If not, examine your spending with two questions in mind: “What can I do without?” and “What’s really important?” If your expenses add up to less than your income, you’re on the right track. If your income or expenses change each month, that can have a major impact on your budget. If it doesn't seem right, check that you've captured all of your income and expenses. At the end of the month, total your income and your expenses and then subtract your expenses from your income. Consider using online tools, such as Budget Watch, to automate the process of tracking your spending and setting up budget goals. Track all your expenses, ranging from larger expenses, such as car, rent, mortgage, or credit card payments down to the amount you spend on daily lunches, or other incidental expenses. For one month, keep a detailed log of your spending. So, you’ll need to gather your financial documents, such as pay stubs, credit card and bank account statements, and auto or student loan bills, to ensure you have enough information to get started. At its core, a budget is a worksheet with separate categories for income, expenses, and savings.

Whether you’re building a budget for the first time or simply need a refresher course, here’s a step-by-step guide to get you started:

But when it comes time to create one – and then stick to it – it can be tough to get started. Most people know they need a household budget.

Monthly expenses and income worksheet