by Stephen H

Created on: August 07, 2010   Last Updated: May 18, 2012

It has often been said that if you spend more than you earn, unhappiness follows, and that if you earn more than you spend, the result is happiness.  Life is never that simple but there is an element of truth to this.  Now is the time to find out whether your finances help to make you happy or not.

It is always useful to keep track of your money so that you can make sure that you are not spending more than you can afford and building up a debt for the future.  Never more so than now, having recently come through one of the worse recessions in living memory.  Still the economic outlook is uncertain.  Many of us have to adjust to a lower salary and it is important that we are clear about both our income and expenditure so we can ensure our families future financial health.  This is why returning to the discipline of setting a budget is so important.  It will help us to manage our finances on a day to day basis and provide us with the information we need to plan for the future. 

Setting a budget for your household can appear complex, but if it is built up in stages, it is really quite straight-forward.

Stage 1  -  Gather the Information.

The first thing to do is gather together all of your financial information.  This will include bank statements, credit card statements, utility bills, savings information, salary slips and any other material that helps you understand how much money you have coming into the household and how much you spend.  Some people keep receipts for purchases and when they withdraw cash from their accounts, but not everyone finds this level of detail necessary.

Stage 2  -  Establish a budget template.

The next thing to do is to decide how you are going to record your financial details.  You may decide to do it using pen and paper or you may decide to use a spreadsheet.  It really doesn’t matter which method you choose, as long as you are comfortable with it.  Most of us find that the features of a spreadsheet will help us with the maths and editing if we make mistakes.  Whichever method you decide upon, the underlying process is the same.

Divide your page (online or paper) into two, one half for recording income and the other expenditure. 

Stage 3  -  Completing your income and expenditure details

On the income half of the page, list all the sources of income for you, or your household if you are preparing a family

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