Step One

Add up all of your household income for a month. If this fluctuates, take an average of the past 6 to 12 months.
Do not include money gifts, bonuses or tax returns.

Step Two

Write out everything you pay each month. This will be in 5 main categories:
Debt
Utilities
Personal
Insurance
Vehicle

Debt will be house, car, credit, medical, personal and so on. Whatever you owe.
Utilities cover electric, water, gas, phone, internet-anything you use in your house each month.
Personal covers groceries, dining out, clothing purchaces and gifts for yourself or others
Insurance includes life, health, car, home owners and anything extra like a camper or boat
Vehicle would include gas, repairs, tires, general maintainence

Step Three
Add up all of your expenses and subract from your average monthly income.

Divide up your expenses into the first and middle of the month-when they are due.

TIPS
If you have some payments that only come out every 3-6 months, such as life or vehicle insurance or property taxes, average them out and set that money aside every month anyway. $30 a month for 6 months is easier to budget than $180 all at once.

Break down other payments to average between 2 paychecks such as a house or car payment. It may be easier for you to stay on budget if your larger payment does not all come from one check.

Set up automatic payments on everything you can. Even if the place you owe money to does not have auto-pay, many banks will make the payment for you directly into their account, check your account online under the 'payments' tab. Your payment will be made on time and budgeted in ahead of time. No more missed or late payments, no more wondering if you mailed that check on time-or at all.

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