Many people don't know how to create a budget or spending plan and don’t know where to start. The first step to getting out of debt is by creating a budget. Creating a budget shows accountability for your spending and shows you how much you have coming in and how much you have going out. It identifies your SEO – what you spend, what you earn, and what you owe.
Make your budget flexible so you have "wiggle" room for unexpected expenses. If you don't have an emergency fund or savings to cover those unexpected expenses you can see right away what areas in your budget you need to reduce spending instead of using a credit card to pay for those unexpected expenses. Most people don't think about how much money they spend per week or per month but when you see all of your expenses written down it provides greater insight into your spending habits.
The first step is to determine if there are some areas where you are spending too much money, you want to have a balanced budget and make sure you don't spend too much money in any one area of your budget. Develop financial goals for yourself when creating your budget. Financial goals encourage you to work towards reaching that goal and provides a sense of accomplishment when the goal is met. Some examples of financial goals are: pay off a credit card, buy a home, take a vacation, etc.
Being debt free is hard work, requires discipline and reduces your anxiety and stress about your financial situation. Many things are possible when you are debt free and live on a budget. Determine if you want to live the rest of your life as a borrower or as a lender. It's up to you!
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