Make a Budget and Get Out of Debt

Do you feel like you’re drowning in debt?  Do you not have enough money to pay your bills?  Is your credit score really low?  You can tackle this problem by using a budget.  But you have to stick to it.  If you get your finances under control, you can live within your means and pay off your debt.  Here’s how to make a budget.
First – List All Your Income
List everything here, on a monthly basis, salary/wages, bonuses, child support, alimony, tips, rent income, etc.
Second – Track Your Expenses
This part is more difficult.  It may take a few months of record keeping to get it right.  Watch where every penny goes, including what you spend cash on.  Include everything – rent/mortgage, utilities, property taxes, insurance, food, telephone, child care, gas, car payment, credit card payments, and all other debts.
Those are the necessary expenses.  Then list the extras like entertainment, clothes, eating out, vacations, gifts, even junk food!  These are the places where you can save if you need to.
Third – Compare Your Income to Your Expenses
Now that you’ve got it all down on paper, you can see the big picture.  You’ll see how much money you need for the necessities and what you have left over for non-necessities.
Fourth – Prioritize Spending
Now that you have the data in front of you, start prioritizing.  Start with the things you can’t live without or have to pay and end with the things that are clearly not something you really need to spend money on.
Your budget has to balance in order for you to not go further and further in the red.  Your debt payments are part of the budget and they need to be near the top of the priority list.  Stick to the budget and you can get out of debt.  Be tough.  You can do it.
If Your Budget Doesn’t Balance
If you simply can’t balance the budget and you’ve been honest about where you may be wasting money, the only thing to do is to generate more income.  That’s easy to say, but you can do it.  Even a very part time job will help.  Or maybe you could look for a new job, one which uses your skills and experience better.  Whatever you do to get more income, be sure you are not tempted to just go ahead and spend it on unnecessary things you’ve cut out.
Fifth – Start Paying Off Your Debts
If you’ve managed to balance your budget, start putting money toward those debts and get rid of them.  Don’t take out a debt consolidation loan.  You may actually end up paying more, believe it or not.

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