I started budgeting several years ago. The first thing I did was write down everything I spent. Then I figured out what broad catagories I should have in my budget and what expenses would go under each catagory. For instance

Giving- Tithes and Offerings, Gifts
Household- Groceries, Home Maintenance, Insurance Home, Furnishings
Medical- Insurance, Dental, Perscriptions

Some other catagores are utilities, transportation, taxes and personal.

I read several books on the subject and kept tweeking it. After about 6 months and then again at 1 year I found the monthly average for each expense so that I could spread the costs out evenly throught the year. This works well for annual and semi annual or quarterly expenses. You need a little extra money to start this process, but it's worth it because you will never have that yearly payment come along and not have the money to pay it. It also gives you a more accurate picture of the money you have committed to pay. When you sign a contract you are making a committment. If you don't plan for it you will spend that money on something else.

The ongoing problem for me has been sticking to the budget but that is another posts.