Get Debt Free By Creating And Following A Budget
by Richard DFO Hijinx
Ok, so you somehow wandered upon Get Debt Free Online and are likely thinking about how in the world to get out from underneath a pile of debt. This is a problem that baffles and eludes many people but the answer is much easier than the actions putting the answer in to motion. Though it is difficult to get debt free, it CAN be done and we will guide you on the journey there.
The first major step in getting debt free is knowing where you are financially. This means you MUST create a financial budget. This is VERY important. In order to become debt free you need to know what income you have coming in and what expenses you have going out each and every month. My personal budgets take this one step further; you also need to account for expenses that are certain to occur annually, such as vehicle registrations.
You may be wondering what you may need to put into your budget. I have put together an example budget below for an average American.
Rent/Mortgage – $1005
Auto Insurance – $120
Auto Loan – $400
Auto Loan #2 – $305
Life Insurance – $65
Water – $40
Electricity – $79
Garbage – $20
Natural Gas – $121
Childcare – $505+
Gasoline – $301
Groceries – $995
Telephone – $40
Cable – $50
Internet – $49
Cell Phone – $100
Credit Card – $100
Student Loans – $100+
Total – $4385++
Looking at the financial budget outlined above, each item taken individually does not seem like too horrible an idea. But taken together things start to get out of hand. In the above budget we have almost $4400 of monthly expenses, AFTER taxes. In order to BREAK EVEN on this type of personal budget you HAVE TO be bringing in about $70K per year. Keep in mind this doesn’t include children’s doctor’s visits, and all the other annual crap we haven’t even addressed yet, such as enrollment fees, the vehicle expenditures such as registrations and the one off mechanical failures that can cost an arm and a leg. It’s no wonder people are up to their necks in debt. Most people don’t make $70,000 and most people have all kinds of one off expenditures that aren’t outlined on the above financial budget. In order to know where you can cut back, you must know what you have.
The first task for you people out there reading this is to do this very first step. Make a budget and BE HONEST – it will do you no good if it isn’t right. As soon as we get this done we will be talking about such things as debt equity, discretionary spending, and financial tools. Let us get our budgets prepared so we can begin working on a plan to GET DEBT FREE!!!
