Keeping control of your personal finances is, in theory, a fairly simple process. It is only human nature that makes home budgeting and financial control so difficult for many people. However, for the sake of this article, we will consider the simple side of the household budget equation, which is making a budget in the first place.

A good starting point in your quest to make a home budget, is to take stock of your current and recent situation, and list out all your monthly outgoings.

If you only do this from memory, there is a chance you will miss one or more important items. You probably have several sources of information on what those regular outgoings are, and whether they are easy to find depends on how well organised you are with your paperwork. It is worth checking back over at least three months bank and credit card statements, and jot down what your regular payments are out of those. At the same time, you can also make a note of items of expenditure that may recur later on.

Another source of information will be the bills and receipts that you have received over the past quarter. If you have not kept such documents and records before, then now is a good time to start. The good organisation of your important financial documents, and orderly filing of bills and receipts, will stand you in good stead for controlling the family budget when it is set.

Going over what you have spent over the last quarter will cover most if not all of your regular payments. However, it is important to think about whether you have any quarterly, annual, or new commitments that may not have shown up in your previous search. This part of the process in making your budget should give you a list that includes utilities (eg water, electricity, gas and telephone), insurance payments, mortgage and loan repayments, and credit card payments.

The regular payments you have so far found will form the core of your household budget. You can now turn those into a formal list, either on paper or on a spreadsheet, and put the amounts into the next column, with a heading notifying the month. Before moving on to the next phase, add a further 11 columns on the paper or spreadsheet, with the headings changed to appropriate months until you have a column for each calendar month for a year. I have prepared an example budget spreadsheet to help you.

For each of the items listed, decide whether they are monthly, quarterly, or yearly, payments, then repeat the monthly amounts in all the columns that apply. For example, monthly payments will go in all 12 columns but quarterly in only in the four columns when payment is due.

The next stage is for you to consider what other necessary expenditure will come out of your income every month. These other expenditure items probably do not show up as regular payments in the first stage, though individual payments may. These items may include food, household goods such as detergents, car maintenance, petrol (gasoline), and fares, which are essential to you, and you need to budget for each month.

Again, list these items in the budget list, and then enter amounts in each monthly column. What you will have then will be the "essential expenditure" part of the budget. This, if you like, is the unavoidable part of your budget. At least, it is unavoidable in the short term.

On top of that essential expenditure, though, we all have discretionary, unnecessary or indulgent expenditure, on things we like to spend on but do not actually have to.

However, before considering your non essential outgoings, there are two things it is advisable to do:

1. Total your monthly essential expenditure for each of the next 12 months, and

2. Write (or type) in your monthly net income at the top of your budget form.

Hopefully, "2" is much higher than "1", and you still have some income left to spend on non-essential things that make life more pleasant, plus some regular savings too.

Now that you know that you have money spare to spend on non-essentials, such as holidays and eating out, then you can also list those. You will then have a complete picture of your spending and income patterns, and have a basic budget from which you can plan ahead and keep your finances under control. If all goes well, you can also budget to save a reasonable amount each month, putting you well on the way to financial stability.

This how to make a budget article was written by Roy Thomsitt, owner author of the Eliminate Credit Card Debt Now web site.