To set a budget, one must examine their financial situation including income from all sources, regular obligations like bills and insurance, necessities like food and clothing, discretionary expenses such as entertainment and eating out divided into family and personal allowances, savings goals, and existing debt. A budget should commit to saving first before other expenses and prioritize paying off debt so those monthly payments can then go to savings instead. The budget should then be discussed, set, regularly reviewed, and adhered to.