Building A Budget That Makes Cents

If you are looking for the get rich quick blog then this is not your stop. However, if you are looking for practical tips for getting out and staying out of debt then I can help you with that because that is where I am but if I ever do get rich quick I’ll let you know how I did it.

Let’s be honest the reason we are in debt is because we have made bad spending choices. Not knowing when and where we should spend our money results in piling debt. The solution is simple but like everything else in the debt retirement process a working budget requires discipline.

Notice I said “working budget.” It doesn’t do any good to have one if you aren’t going to live by it. Most people are afraid to live by a budget because they think that it means that they can’t go out and buy what they want any longer. That’s not necessarily true. Living by a budget will tell you when you can go out and buy what you want without going into debt.

Getting started is easy. Just make a list of all your monthly bills. The big ones are easy (mortgage, rent, utilities, etc…) but make sure you don’t forget the smaller ones like groceries, credit cards and gas. It’s important that you list all the bills that you have to pay first before moving to the things you want (cable television).

After you have completed your list you will want to sort them by the date they are due and then assign each bill to a designated pay period that allows you to get it sent off in time.

The next thing you will want to do is designate a specific amount for savings. Remember building an emergency savings account is crucial and can help prevent you from going further in debt.

The final step to building your budget is to add in the things you want. This is where your cable television comes in as well as eating out, going to the movies and other entertainment and luxury expenses. It is also beneficial to budget an allotted amount of money each month to go towards your vacation but that’ll be the next post.

Now you know exactly what you can and can’t afford each month and how you can save for the big things without going into debt. Living by a budget has allowed me to not only quit using my credit cards but also pay more than the minimum amount due each month.