Thoughts on Debt

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in.  Well, the key to it all is devising a budget and sticking to it.  Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget.  A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that.  It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras.  Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies.  I personally prefer a two savings plan system, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV.  This is a good way to be able to reward your hard work saving and feel a benefit from it.  It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures.  For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out.  If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job.  The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life.  Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry.  Take the time to work out your budget and you will see how easy it is to keep your finances under control.

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