- 1). Gather all of your financial records including bank statements, bills and receipts. Organize them into piles in front of you that are separated by categories. Make one pile for income, then several other piles for bills, entertainment, investments and other categories of expense that you may have.
- 2). Orient your sheet of paper horizontally in front of you. Gather all of the papers in your income pile and sort them into types of income if you have more than one type. On the left-hand side of your sheet of paper create a column of boxes with one box for every sort of income you have. Label each box with the type of income it represents--for example, interest, salary or dividends--and the sum of the income.
- 3). Gather all of your bank statements. On your paper to the right of your types of income boxes create a column of boxes with one box for every bank account you have. Label these boxes with the names of their corresponding bank accounts. Now draw an arrow from every source of income box towards the bank account box that income goes into. In some cases, the source of income box may have more than one arrow if you divide the income between more than one bank account. Label each arrow with the exact sum that went into the bank account. Write the number of your total holdings in each bank account box. Note that this number may be higher than your income, because you may have savings. Make sure that the number you write matches your bank statements.
- 4). Create a column of boxes that represent general categories of expense to the right of your bank account boxes. You can decide what categories suit you best, such as housing, transportation, entertainment, savings, credit cards or whatever you like. Draw arrows connecting your bank account boxes to your general expense boxes, but do not write any numbers on the arrows or the boxes yet.
- 5). Draw a column of boxes representing your specific expenses and bills to the right of your general expense boxes, grouped by the general expense category these specific expenses would relate to. Fill in the specific expense boxes with the name and sum of the expenses you have, and draw arrows connecting the general expense boxes to the specific expense boxes.
- 6). Look at the figures in your specific expense boxes now that they are grouped into categories. Add these figures according to the categories they are grouped in, and write the total sum you are spending on each general expense in the correct general expense box. This chart will now give you a very clear picture of how much money you are bringing in and what you are spending it on.
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