Whether you are a new couple just starting out or a family who has to get a handle on their finances, preparing and sticking to a realistic budget isn’t as hard as it sounds.

Before you even begin to add up everything, you’ll need to make a list of everything that you spend money on. That means everything, and it has to be itemized, in order to get a good idea of where your money goes and what your priorities are. Here is a quick reference list, with some of the items that we tend to forget or lump into other categories:

• House payment or rent
• Telephone
• Magazine subscriptions
• Cell phone
• Electricity
• Clothing
• Gas
• Water
• Shoes
• Sewer
• Garbage
• Pet food
• Cable
• Internet
• Movie rentals
• Food
• Prescriptions
• Medical bill payments
• Insurance (car, life, home, list them separately)
• Gym membership
• Toiletries
• Sundries
• Entertainment
• Credit card payment
• Loan payment
• Gasoline

Gather all of your bills and make a list. Some of the items listed above will not apply to you; you may have some expenses that aren’t on the list. Some financial advisers will tell you to start with your gross income, but I say, what’s the use? You don’t see your gross income, you live off of your net income, so let’s be realistic.

Notice savings isn’t listed above. That’s because it’s not an expense, however, you should put at least 3% of your net income right into your savings while your at the bank cashing your paycheck. Don’t even think about it, just do it. You’ll see it grow in no time. After you complete your budget, you may see that you can afford to put a little more than 3% into your savings, but for now, let’s go with 3%.

Now that you have a list of where your money goes, add it up and deduct it from your net income. Whatever is left over can be allocated to savings or emergencies or other expenses. More often than not, if you need a budget plan, it’s because you added everything up and you don’t have enough to cover everything each month. Well, that’s most of us. The average American lives only one paycheck ahead of the game, so let’s look at what can change in your spending habits in order to further your budget.

Get a clean sheet of paper and divide up your list:

Bills that have to be paid each month
This includes food, shelter, and to some degree, clothing. The average American is also wasteful, buying new clothes when they feel like it or changing with the styles. Our landfills are teeming with clothes that are still perfectly useful, had they been donated or repaired, rather than thrown out. This list has to also include payments that will ruin your credit or cause you to drive illegally unless they are paid. Include credit card payments, car insurance, etc.

Bills you choose to pay each month
Here’s where it gets tricky and arguments start. Now just listen a minute. Do you really need a car that costs so much to buy gas and insurance for, and make car payments on? Rethink whether or not you need a car with such a high monthly payment. Do you really need that gym membership? How often do you use it? Magazine subscriptions? Do you read them or do they go into the magazine rack as soon as you bring in the mail?

With a little rethinking, you may be able to make a budget and stick with it. For more answers, contact your community co-op, they often have free seminars as to how to save money in each of the specific areas listed above.