Making A Budget
Step 1: Getting Organized

Being prepared is really key to making a budget that works.

Find Or Create Home Budget Heaven

Finding or creating a spot perfect for making a budget can be as easy as sitting at your kitchen table, with a portable filing cabinet full of your files and office supplies.

Or, you can really turn creating a household budget into a fun DIY project by taking a closet or corner of your home into a cozy home office.

Our filing cabinet

One of the first ways to defeat human nature when it comes to personal budgeting is to make the entire process something you find enjoyable. (If you dread it, you won't do it for long...kind of like exercising or dieting.)

So, get creative! Use favorite desks, chairs, pillows, lamps, photos, pictures, music, colors, fabrics and so on. It doesn't have to be expensive or fancy. If all you have is your kitchen table and a rolling file cart (like ours, below), then put on comfy clothes, switch on your favorite music or movie, pour a cup of coffee (or your favorite beverage) and relax!

No matter where you set up your special budget haven, you will need a file box or drawer for all your personal budgeting records. You will have two types of records:

  • Financial files
  • Home budget files

Financial files will hold documents like insurance policies, 401(k) statements and bank records.

Home budget files will hold income, expense and tax records. (We use a two-drawer plastic rolling file cart for our files, plus a plastic file box for archived records stored in the basement.)

Wondering where I got the file labels in the photo above? It's actually a (very) complete home filing system created by my friend and favorite organizing guru, Maria Gracia of You can learn more about her system here.

Gather Your Office Supplies

Once you start creating a budget, you won't want to stop, so purchase or gather the following supplies:

  • Pencils, black pens, highlighters, red pens
  • Stapler and staples
  • Manila file folders
  • Hanging file folders
  • Paper clips
  • Calculator

Gather Your Home Budget Records

If you already have some files, this will be an easy task. If your records are in piles,'re going to be doing some sorting!

Starting a household budget will require bank, income and expense records. Here are some examples of papers you should be collecting:



  • Pay stubs
  • Dividend or interest statements
  • Other sources of income


  • Pay stubs (for 401(k), 403(b) or deferred compensation retirement account contributions)
  • Investment account statements (for regular contributions other than through employer)
  • Bank statements (for regular deposits to savings account)


  • Checkbook registers from the past year
  • Bank statements (for online bill payments)
  • Credit card statements
  • Receipts
  • All monthly bills, one file folder per bill
  • Bi-monthly bills
  • Quarterly bills
  • Semi-annual bills
  • Annual bills
  • Occasional or unexpected bills, such as auto repairs and home maintenance

Your goal here is to have everything related to your finances within reach when you're making a budget. You can sort and file as you move along, but if you gather most of these items and organize them ahead of time, you'll be in great shape.

All set? Then it's time to move to the next step in creating a personal budget.

Click here to go to Step 2: Income.