Planning

• The first step to managing a household budget is to make a plan. Whether you use an online tool or pen and paper, you must create categories. The two main categories are income and outgo. Write down all the income for the household that will go toward paying bills. This is your starting number.
  
  The outgo category will contain all of the reoccurring monthly bills that make up the bulk of your spending. Once you have all of the categories labeled, you can begin to assign money to them. Create your budget so there is a zero balance by assigning limits to all categories and the leftover to savings.
  
  

Trimming Down

• Nearly everyone has experienced a time where the money runs out, but there is still more month to go. Overspending is the quickest way to get into debt. If you have a negative balance for your income after inputting all your bills, trim down your expenses. Lower your cable package or get rid of it. Lower your food cost by using coupons and checking the store fliers for good deals. Reduce each bill possible, including your insurance and car payments. Refinance your car to get a lower payment, and raise your deductible for a lower insurance payment.
  
  

Setting Goals

• Once the basics of the budget have been put in place, you can see where you are spending money. This is key to managing your budget. Setting financial goals allows you to direct extra money that was being wasted into a savings account. Start small by making a goal to save 20 dollars a week to put in savings until you understand your budget better.
  
  

Executing

• Once your budget is in place and you have set your long- and short-term financial goals, it is time to execute your budget. The ultimate goal of a budget is to pay all the bills on time while saving enough for retirement and other financial goals. Think of each category as its own account, and balance the account as you would balance a checkbook by subtracting expenses from the starting amounts allocated.
  
  

Tools

• There are many tools available that make budgeting a snap. To find the one that works best for your family, think about what you need. Ask yourself if you need software that connects to the bank and downloads all of your transactions, or whether you feel more comfortable doing all these by hand.
  
  

Emergency Funds

• Suze Orman, author of The Money Class, recommends that everyone have an emergency fund. This is a bank account, preferably a savings account that earns interest, with up to eight months' worth of bill money. This is to cover insurance deductibles that were raised to save money, if you or a spouse loses a job and emergency medical expenses. This emergency fund is not for vacations, retirement or large-ticket items that you have been looking at. The emergency fund is what will get you through a brief financial hardship.