Getting out of debt is not easy. It is similar to a weight loss story. It's easy to add the weight on but hard to take it off and boy is debt heavy!! However, by making a plan, you can eliminate debt in your life. It will be hard work but it will most definitely be worth it.
ANALYZE THE BUDGET
Once you set up the budget, then you have to squeeze the budget. What are the categories you are spending too much on? This is a great area to ask for advice from others. For example, I recently ran the numbers and for my family of 4 (two are really young so may compare to 1) we spend about $400 a month on groceries and dining combined. This even includes Starbuck runs but those I usually pay through Swagbucks gift cards. When a friend compared her budget she was paying $7-800 just on groceries for 3. Oh and don't get me wrong, we don't mind picking up some steaks in the summer to grill. We also have a very small clothing budget it's just not an area where we desire to spend much on and if I do buy something unless it's hanes socks (cheap socks didn't make the cut for my husband) then I only buy on sale, non-name brand or my favorite garage sales. However, once you get out of debt feel free to lessen the hold. I now splurge on LuLaRoe once in awhile.
3. Enjoy the process. It will be hard. Let me say that again. It will be hard. Remember the weight loss picture. However, dream big. Less debt will result in less stress. No debt will give you stress free vacations, retirement money, college savings for your children.
WHERE TO START:
1. Accountability. If you are married you and your spouse need to work together to get on the fastest route. Single: Ask a parent, responsible friend, me, possibly an older sibling to help keep you focused.
2. Budget. THIS IS A MUST. Sounds so simple but you will quickly find out that it takes time and work to stay on budget with life's surprises. The initial three months are always the hardest as it can be hard to know where to start. Keep at it as each month you will get more tuned in to what are required expenses and where you are spending too much on non-essential items. Don't forget to review some recommend even signing off a married couple to follow the budget and talk before making any purchase that would cause a segment of the budget to be over spent.
Have kids? If they are 5 or older they can be a part of the process. Don't overwhelm them but as you are learning to budget, save, and spend wisely encourage them when they ask for items to consider if it is a need or a want. Is it a toy? Do they have a job (babysitting, chores, newspaper) to pay or partially pay for it? Create a work ethic even if it is simply chores around the house. Help them to learn that hard work pays off. If they are earning money have them consider separating it into three accounts(Or penny banks) saving, spending and giving.
A couple sites I use:
Mint.com
I have used this site for years. I love the tracking of expenses. You can add loans, banks, goals and budgets. Con: If you are really trying to get out of debt this is not user-friendly for budgeting purposes but definitely a great big picture of your financial status.
I have used this site for years. I love the tracking of expenses. You can add loans, banks, goals and budgets. Con: If you are really trying to get out of debt this is not user-friendly for budgeting purposes but definitely a great big picture of your financial status.
This is a great budgeting site. The free site has you literally add in your income and expenses each month. If you are in debt beyond a mortgage, I think this is a great tool to be very thorough. When you have to sit and list your restaurant expenses of $400 a month it hits home a little harder on how high it is. This site is created by Dave Ramsey and has a link to his baby steps for a helpful reminder. When we were working through our debt this site was not available so I used an old fashioned Excel spreadsheet. This site works very similar to my old system but copies over the monthly budget in a simpler and well-designed way.
ANALYZE THE BUDGET
Once you set up the budget, then you have to squeeze the budget. What are the categories you are spending too much on? This is a great area to ask for advice from others. For example, I recently ran the numbers and for my family of 4 (two are really young so may compare to 1) we spend about $400 a month on groceries and dining combined. This even includes Starbuck runs but those I usually pay through Swagbucks gift cards. When a friend compared her budget she was paying $7-800 just on groceries for 3. Oh and don't get me wrong, we don't mind picking up some steaks in the summer to grill. We also have a very small clothing budget it's just not an area where we desire to spend much on and if I do buy something unless it's hanes socks (cheap socks didn't make the cut for my husband) then I only buy on sale, non-name brand or my favorite garage sales. However, once you get out of debt feel free to lessen the hold. I now splurge on LuLaRoe once in awhile.
3. Enjoy the process. It will be hard. Let me say that again. It will be hard. Remember the weight loss picture. However, dream big. Less debt will result in less stress. No debt will give you stress free vacations, retirement money, college savings for your children.
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