Become Debt Free By Creating A Budget To Follow
by Richard DFO Hijinx
Ok, so you somehow come upon Get Debt Free Online and are probably thinking about how in the world to get out from underneath a mountain of debt. This problem baffles and eludes many people but the answer is much easier than the actions putting the answer in to motion. Though it is tough to become debt free, it CAN be done and we will guide you on the journey there.
One of the first major steps in getting debt free is in knowing where you are financially. Knowing where you stand financially means you MUST create a budget. Drawing up a budget is EXTREMELY important to your long-term success. For you to become debt free you must know what monthly income you have coming in and what monthly expenses you have going out every month. My personal budgets take this one step further; you also must take into account expenses that are likely to happen annually, such as vehicle registrations.
What do you put in a budget? I’ll show you what a typical expense budget might look like for the average American.
Rent/Mortgage – $995
Auto Insurance – $125
Auto Loan – $400
Auto Loan #2 – $295
Life Insurance – $66
Water – $40
Electricity – $79
Garbage – $19
Natural Gas – $120
Childcare – $495+
Gasoline – $300
Groceries – $1000
Telephone – $39
Cable – $50
Internet – $49
Cell Phone – $100
Credit Card – $101
Student Loans – $100+
Total – $4385++
Looking at the budget shown above, each item taken individually does not seem like too horrible an idea. But taken together things start to get out of hand. In the above budget we have nearly $4400 of monthly expenses, AFTER taxes. In order to BREAK EVEN on this type of financial budget you MUST be raking in about $70,000 per year. Keep in mind this doesn’t include children’s doctor’s visits, and all the other annual crap we haven’t even addressed yet, such as enrollment fees, the vehicle expenditures such as registrations and the one off mechanical failures that can cost an arm and a leg. It’s no wonder people are up to their eyeballs in debt. Most people don’t make $70K,$70,000 and most people have all kinds of one off expenditures that aren’t outlined on the above financial budget. In order to know where you can cut back, you have to know what you have.
The first task for you people out there going over this is to do this very first step. Make a financial budget and BE HONEST – it will do you no good if it is not accurate. After we get this done we will be talking about such things as debt equity, discretionary spending, and financial tools. Let’s get our financial budgets prepared so we can begin working on a plan to GET DEBT FREE!!!
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