Developing a budget might require some thinking but if you manage do it right, you will reap the benefits in the future. First you have to look at your monthly income, this can include your wage, dividends and other types of income. Once you determine your monthly income, you can assess your expenses. First see what your expenditure is for a month by collecting all the bills and receipts. It is important to gather every receipt regardless of how small it might be. It will help you to divide your expenses into non-discretionary expenses which are things that you cannot do without such as paying for your monthly internet access or computer loan, and discretionary expenses such as dining out. This will give you a clear picture on which activities you are forking out your money. The best way to reduce your expenses is by starting to reduce your discretionary expenses, since non-discretionary expenses can be harder to adjust.