Before you begin a budget you must know how much money you are making weekly. This can include money you receive from investments or other forms of residual income. Next, you must assess your weekly and monthly expenses, including any money that you spend on fun things like eating out, entertainment, recreation, and any minimum payments that you pay toward your debts. You may want to include extra money for emergencies in this group. There are budget forms that can be found in numerous financial books or online that may assist you in this process.

You next want to test out the effectiveness of your budget. Simply subtract your monthly expenses from your earnings. This will show you how much you can expect to have at the end of the month. If your budget comes out on the negative side, rework numbers by going over each expense and looking for places to make cuts. Do this until your budget makes sense and you feel comfortable with your budget commitment.

If possible you may want to also budget for long term financial goals. Do you want to have an emergency fund? Do you want to have investments for retirement? Do you want to vacation once a year? By making a list of what you want to achieve financially, you may find that you need to adjust your budget again to attain these goals. If you have a lot of debt, you may need to determine if you are able to pay extra each month of those payments to eliminate those faster.

The next step to creating a weekly budget is simply to put your budget to work. Once you've created your budget, try to live within your goals and see how it works and feels. You may need to access your budget at the end of the week and month to determine if it is working for you. Are you expenditures matching up with your budget? Are you spending too much money in one area? If you need to adjust your budget to reflect your actual spending, that is okay. After all, that is what a budget is for.

You must continue to look over your budget every week and month to make sure that you not over spending in one area. A few ideas to help you live within the budget you have created are number one, be honest with yourself about your spending habits. If you do this you will have a much more realistic budget. Second, don't forget to budget entertainment and fun! There are many ways to have fun and be frugal at the same time. Living on a budget doesn't mean deprivation! And lastly, don't be afraid to adjust your budget. If it isn't working, crunch numbers until they make sense for you and your family.