Assess Your Financial Situation
Any plan to become debt free and get your spending under control always begins with understanding your current financial situation.
How Much Do You Spend Each Month?
The first thing you will want to do is to calculate your monthly costs. Figure out exactly how much you spend on items such as rent, food, gas, utility bills, eating out, toiletries, and other incidentals.
What Is Your Total Debt?
How much debt do you currently owe? Factor in your mortgage, unpaid credit card bills, unpaid utility bills, car loans, and other loans.
What Is Your Monthly Income?
How much money do you bring in? Include income from your job, investment income, and rental income. How does this compare with your expenses and debt repayment obligations?
Create A Budget
A budget is a great way to manage your expenses. It helps to ensure that you live within your means and helps to reduce debt. Try to get creative and find ways to trim your budget.
- Create a meal plan for the week and buy only the foods you need
- Check out the weekly grocery deals and base your weekly menu around food savings
- Bring a packed lunch to work instead of eating out
- Combine errands wherever possible to save on gas
- Cancel any streaming services or apps that you may not be using
Once you have trimmed your expenses and factored in your costs, create a realistic budget and stick to it. Don’t forget to set a little aside in a savings account for any unexpected expenses that arise during the month.