The "Ins"! First, write down the total amount of money you take home every month (after taxes and deductions). If your spouse or partner's income helps pay the bills, include that too. If your income changes every month, use whatever you think best represents what you make on average every month or the amount you normally get.

Add any other money you get regularly, such as alimony or child support, disability, unemployment insurance or pensions.

The "Outs," or the money you spend every month. Estimate your monthly spending for each category. You may want to round up or estimate high in case you over-spend some months. If you use credit cards, you will need to list the amounts you spend using the cards in the expense categories. (So if you spend $100 per month for gas, using your credit card, put $100 on the line for gas.)

You also need to include occasional costs, things like vacations, hospital bills and gifts. How much have you spent on these things over the past year? Total them up and divide that number by 12—that's your average monthly spending for each type.