Before you can make any decisions about your money, you need to look at your present circumstances very carefully. By using the worksheets in Personal Budget Lists, you can assess your present financial situation and prepare a balanced personal budget. When you have prepared a personal budget you can use this to help you decide on savings or investments, or if you have debt problems you can use the budget to negotiate repayments.

Household income
Make a list of all your sources of your household income and how much you get from each. In many cases, the household will be just you, or you and your partner. Possible sources of income include wages, Pension Credit, State Retirement Pension, Occupational or Personal Pension, Attendance Allowance or Disability Living Allowance, Housing Benefit, Council Tax Benefit and income from savings and investments.

If you have non-dependants living at home, for example your grown-up children, remember to include as income any money they give you for their keep. Non-dependants are adults who live with you but are financially independent; in other words they work or receive benefit in their own right.

Decide whether you want to work out your personal budget on a weekly or monthly basis and convert each item of income accordingly. For example, if you receive a personal pension of £24.00 a month multiply this figure by 12 and then divide by 52 to obtain your weekly figure (£5.54). If you are paid every four weeks you can simply divide by four to reach the weekly figure. Multiply weekly figures by 52 and then divide by 12 to convert them to monthly figures.

Enter the figures in List 1 of your personal budget in Personal budget lists. Don't put down possible rises in income at this stage in case they don't happen. If your income or expenses do change you should re-do your budget list. It's also useful to update your budget list each year, around April (when pension and benefit rates go up).

Household expenditure
Make a list of everything you and your household spend money on. You may need to take a few days, as it can be difficult to remember everything at once. Try to put down as many things as you can. Next to each item, write down whether you pay for it weekly, monthly, quarterly or annually. Make the best estimate you can for variable or irregular payments (like home repairs, holidays and entertainment). If you are a care owner your estimate should include servicing, tyres and parts as well as petrol, road tax and insurance. To look at the Personal Budget Lists, see the section called Balancing the Budget.

Convert each item of expenditure to a weekly or monthly amount and enter the figures in List 2 in Personal budget lists.

Your assets
This list should include the amounts you have in any savings accounts, premium bonds or savings certificates. You should also note down the value of any life insurance policies (remember if you cash in a life policy you may lose some money), your car, house and jewellery. Enter these figures in List 3 in Personal budgets lists.

If any items are not fully paid for or you still owe money on a mortgage on your house, make a note of the amount owing against the item on your list.

Try to get up-to-date information on the value of each item. This may mean a call or letter to your building society, bank or life insurance company. You might want to consider having potentially valuable items (like jewellery) professionally valued, although you will probably have to pay for this.

You should seek independent advice if you are planning to cash in or sell your assets. Remember you could end up losing money.

Credit, Debts and Arrears
You may have a credit card or a loan to pay off, or you may have fallen behind in paying your mortgage, rent or bills. Enter the amounts that you owe and the weekly or monthly repayments that you are currently expected to make for your credit bills/debts and arrears in List 4 in Personal budget lists. Make sure the figures are as up-to-date as possible by checking your statements or by contacting the lender.

Remember to make sure you have changed all your income, expenditure and credit bills to either weekly or monthly figures - don't mix the two.