How to Keep a Budget, Getting Started

You can either use paper and pencil, or ink, or you can make use of spreadsheet, it really doesn't make any difference. First list all the things you need to spend your money on each month: rent/mortgage, food, utilities, transportation, but only those things you absolutely need every month. Then make a list of your debts: credit cards, car loan, other loans. Now it's time to make list of all your sources of income.

Add up each group, by itself first, then subtract what you spend each month from your income. Still have money left over, good. If not, you will have to see where you can cut some expenses to either bring the total to zero or a positive number.

That's not where it ends. Every one of us spends money daily on things like, lattes, cigarettes, gum, candy bars, after work drinks, parking, slurpy's, and so on. Things we can learn to live without or much, much less of.

When I started, I didn't know how much I spend on these things I really could live without. So, I bought a simple pad and kept a pen with it in order to record every single item I spent money on. At the end of the month I was shocked to see just how much money I was wasting, so I cut out many of the items. This savings alone allowed me to make much higher payments toward my debt.

I think you should do the same thing. When you debts are paid off, don't go back to wasting your money on these items, rather this can be a great source of money to put toward savings.



Time to Dig a Little Deeper

To help you get out of debt, cancel your credit cards, every last one of them. Learn to live on cash instead. Once you have been doing this for a while, you will wonder where all the money came from you now have and its because you are not sending it to the credit card companies.

--Do you leave the lights on in rooms you are not using? If so, turn them off.

--Do you turn on the air-cond throughout the night? Set it to switch off after 3 hours, automatically.

--Do you buy lattes, or other specialty coffees each day? Drink regular coffee and less of it.

--Do you buy an afternoon snack? Don't, you really don't need it.

--Do you buy bottled water? Stop, its much cheaper from the tap and often that's all bottled water is.

--Do you eat chips of some kind? Stop, they are bad for your health and too expensive. Eat an apple.

--Do you pay a daily or monthly parking fee? Walk, ride the bike, use public transportation instead.

Take a look at your notebook you've been keeping and see what items you can cut out completely. Then take a look at what you can cut back on, drastically. Doing any of these things will add up to a savings of more than $100 each month which you can put toward paying off your debt.