The first step in creating a budget is listing all one's present expenses to see where one's money is being spent at the present and then trying to see where expenses can be reduced and also to set limits to different categories like say groceries say $450 per month for that for two people for example. It is also necessary to see what are the sources of income and when these might change or improve ie getting a pension at age 65 for example, to help pay the bills.
