I KNOW it doesn’t sound fun, but budgeting is the #1 Key to getting out of debt! Hands down. You have to TELL Your money where to go, or it will be gone, and you won’t know where it went. Here are some steps to starting your budget.
- You can download my FREE Budgeting Spreadsheet HERE! This is going to help you stay organized and pay off debt.
- Determine your income. Are you paid every two weeks? Weekly? Once a month? You can edit my spreadsheet to meet your needs. You can input your income and your spouse’s. Or just yours, or just your spouse’s plus any extra you expect to make…make it fit your lifestyle. Input your income into the spreadsheet like this.
- Next, Fill out the first page of the spreadsheet with all of your expenses. Be sure to include your yearly expenses, too (so they don’t surprise you later!) Include the due date, payment amount, and whether or not it’s on auto draft.
- GO to the “Debts” tab on the spreadsheet, and enter your debts in order from smallest to largest. We are going to TACKLE these and help you become DEBT FREE! What you input here will populate the ‘Snowball’ tab. If you aren’t familiar with the Debt Snowball, I recommend purchasing and reading “Total Money Makeover” by Dave Ramsey! Also, you can check out my post here about other ideas to help get you out of debt quickly. I recommend posting your debt snowball worksheet somewhere that you can see it often, maybe on the fridge. It will help keep you motivated. And make it a BIG CELEBRATION each time you eliminate another debt. You can color in this chart as you go (it’s included in the freebie!).
- Look over your monthly expenses and eliminate anything that isn’t necessary. Do you NEED cable to survive? Not really. It’s not fun to give it up, but remember, it’s only temporary. Replace it with Amazon Fire Stick for a year. The savings will be super helpful in paying off other debt! Once your out of debt, you’ll have a lot more discretionary income to play with. (Coming Soon – 10 Easy Ways to Reduce your Monthly Expenses)
- Work on reducing your grocery budget. I recommend reviewing how much you’ve spent on groceries over the last couple of months, then working to reduce it by 10% each month, until it gets to a more manageable amount. You can learn about couponing here, or getting cash back from grocery shopping here. Work hard to reduce this.
- Add extras into your budget. If you know you have a big family vacation coming up, budget accordingly. Don’t rely on your credit cards. Budget $100 a month, or whatever you can afford to make it happen. If you don’t have enough extra to budget for this, consider postponing your trip until a few of your debts are paid off.
- CONSTANTLY UPDATE YOUR BUDGET. Review it at the end of each month, and identify problem areas. Either make a plan to reduce your spending in those areas, or allot yourself more funds. You will learn as you go. You’ll be a pro in no time!
- COMMIT, COMMIT, COMMIT! Make a plan, and stick to it. Tell that money where to go. Stay on target. Find like-minded friends. Get on the same page with your spouse and family. Make it happen. You’ll be SO glad you did!
Email me with questions! Go Tackle that Debt!