| Budgeting is the backbone of a good debt | | | | The first thing you do is stop going out to eat, stop |
| management plan. Without first setting up a budget | | | | buying the $4 cup of coffee every morning and get |
| you do not know what your financial situation is | | | | some special coffees like Starbucks from the grocery |
| actually about. You need to know how much money | | | | store. You do not have to go without you just have |
| you will have each month to meet your expenses. | | | | to scale back all variable expenses. |
| You can start by gathering all your financial | | | | After having set up a budget you will need to |
| documents, bills and all other expenses. Determine | | | | monitor it monthly. Make sure the amounts are |
| your income from all sources. Determine your fixed | | | | adequate to pay the expenses. You can track your |
| expenses. Fixed expenses are items like your | | | | expenses on ledger paper by outlining income and |
| mortgage payment which remains the same each | | | | expenses and verifying there is enough money |
| month. Other fixed expenses include cable, internet | | | | available to pay all bills. The money that is left over |
| service, student loan. Now determine the amount of | | | | should be put to good use or go into a savings |
| money you spend on variable expenses which include | | | | account, not into higher variable expenses. |
| things like groceries, gas, eating out, clothing and | | | | Review your budget and make adjustments where |
| entertainment. Variable expenses are ones you can | | | | needed. Make sure the income is providing enough |
| control and cut back on. While groceries are a | | | | funds for the expenses. Make sure your budgeted |
| necessity you can stop going out for dinner and save | | | | cost and actual cost were the same or if not why |
| the money for your grocery bill. | | | | not? You will find that you are tweaking the budget |
| After looking at the financial documents and income | | | | periodically to reflect new debts or reflect paid off |
| and expenses you can compare your income to your | | | | debts. |
| expenses and see where you end up. You now | | | | The backbone to debt management is the budget. |
| know how much money you have left over after | | | | By setting up a budget, monitoring it and most |
| paying all bills and expenses. If the end result shows | | | | important sticking with it you will find your debt is |
| more income than debt then you are off to a good | | | | under control and you will not have to worry about |
| start. If your income is less than your monthly | | | | the stress of being in debt. |
| expenses then you will have to find places to cut. | | | | |