Get Rid of Debt by Edna Ferman - HTML preview

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n order to become debt-free, you must create a practical budget, it is a vital part of becoming debt free. When you understand what your income and expenses are, you can take more control over your spending. This is a core part to becoming financially free.

When you’re in debt, it may be hard to see the light at the end of the tunnel; however, alleviating your debt is simple if you create a structured budget plan.
A simple budget details how much money you earn minus how much you spend. When you create a budget, you get a good look at where you can reduce your spending.

Sometimes, you’re aware that you need to set yourself and your spending habits up on a budget but you aren’t exactly sure where to start or how to do it. Normally, budgets are set up and based upon a monthly basis. Monthly budgets work; however, weekly budgets may work better for you and your money. You need to decide which type of budget will be easier for you to maintain—a weekly or monthly budget.

Once you set up your budget, you will have a better understanding of your current financial situation, and be more in control of your household spending. 00002.jpg

Fast Steps to Create Your Own Budget
Your Earnings:Your first list should consist of your earnings. Write down all your

income streams so you can determine how much you are really making. Once you write down what you get from each stream, add them up to get your total income.

Your second list is going to be your expenses.

Your expenses are divided into three groups: scheduled expenses, living expenses and unexpected expenses.

Scheduled Expensesare going to consist of those expenses that you take out

of your bank account and your credit card each month. This includes car payments, insurance payments, utility bills, loan repayments, mortgage payments and medical expenses. Anything deducted from your account regularly each month is going to go in this list. Once you have it all written down, it is time for you to add them up and write down the total of your scheduled expenses.

Living Expensesconsist of the costs of your cell phone, electricity, credit card

payments, clothing, toys, child care, schooling, dry cleaning, gardening and anything else, such as that cup of coffee you buy each morning and the movies you rent on Friday night. You need to list all those expenses. These are your living expenses; add them all up for the total amount.

Unexpected Expensesconsist of unpredictable expenses such as a new

computer, furniture, travel, vacations, and special presents. You have to budget for these expenses too.

The Budget - Once you have all your expense totals, compare them against your


Remember, a simple budget details how much money you earn minus how much you spend. Now, you can really be in control of your money since you have all the figures in front of you. You can decide which expenses are unnecessary and which ones you would like to eliminate in order to be more on top of your budget.


Your aimis to spend less than you earn so you can put aside some money for


It is often difficult to think about the money you spend every day. As a result, you need to create a daily expenses list, detailing everything you spend throughout your daily routine. Write everything down so you can add that onto your monthly expenses. When you add it all together on one list, you can really look at how much money you’re spending as well as what specifically you are spending it on.

Categorize your expenses using a budget worksheet. Then determine what your monthly average is. You can also keep track of your money on spreadsheets if you would prefer to use the convenience of a computer. In Microsoft Excel, you can create the same records. Excel can also provide you with calculations such as how much money is spent in individual categories.

This solution provides numerous benefits. It willallow you to refer back to see where your money went, as well as how much money went into each category. This method may help you realize where you are spending too much money and allow you to adjust your spending habits accordingly.

If you keep good records, you can put your spending into perspective. Keeping up with all the expenses, bills and other receipts helps determine where the money is going. This information is crucial for sticking to a budget. It will also help you ensure that money is not being wasted. The type of system is not important; the information must just be organized, categorized and easy to work with.

REMEMBER: If your expenses are LESS than your earnings, you are living within your means!