- 1). Figure out your income. Use your paycheck stubs or bank account statements to figure out how much money you make after the taxes are taken out. To simplify things, don't bother dealing with taxes with regards to your household budget unless you are self employed or own your own business. Don't forget other sources of income, such as any substantial interest income or income from a part-time job. Add up all the monthly sources of income and write this final figure down.
- 2). Write out your recurring monthly financial obligations. Take a look at all your bills including credit cards, car loans, mortgage or rent, utilities and any personal loans. Write down the total amount of money you pay each month for these bills. If the amount varies, try to figure out an average or at least the minimum payment. When first composing your household budget you can lump all these expenses into one group or you can write an itemized list.
- 3). Determine your other expenses. Estimate how much money you spend each month for expenses such as groceries, gas, entertainment, childcare and other expenses. Try to be as accurate as possible and remember to include everything you spend money on. For example, if you start every day with a latte from a coffee shop, this expense should be included in this amount. Don't forget to include savings, investments and charitable donations. Write down the total estimated amount, or for a more detailed budget, make an itemized list.
- 4). Do the math. Add all your expenses together and subtract this amount from your total income. If you still have money left over then that's a good sign because it means you're living within your means. If there is very little or you come up with a negative number then you'll need to make some adjustments. You have two choices: Bring in more income or spend less money.
- 5). Be prepared to adjust as needed. The great thing about a household budget is that it is always subject to change. It's not something you simply write once and you're done with, but instead is constantly evolving to meet your needs. Every month your budget should adjust according to any changes made to the household finances, such as a raise in income or a new loan. You should also be prepared to make many adjustments to your budget for the first few months as you grow used to following the budget instead of spending with reckless abandon.
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