Get Debt Free by Creating and Following a Budget

Ok, so you have stumbled across Get Debt Free Online and are probably wondering how on earth to get out from underneath a pile of debt. This is a problem that plagues many people but the answer is much easier than the actions. Even though it is tough to get debt free, it CAN be done and I will show you how to get there.

The first major step in becoming debt free is knowing where you stand. This means you MUST create a budget. This is VERY important. In order to become debt free you need to know what income you have coming in and what expenses you have going out each and every month. My personal budgets take this one step further, you also need to account for expenses that are certain to occur 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 - $1000
Auto Insurance - $120
Auto Loan - $400
Auto Loan #2 - $300
Life Insurance - $65
Water - $40
Electricity - $80
Garbage - $20
Natural Gas - $120
Childcare - $500+
Gasoline - $300
Groceries - $1000
Telephone - $40
Cable - $50
Internet - $50
Cell Phone - $100
Credit Card - $100
Student Loans - $100+
Total - $4385++

Looking at the above, each item taken alone doesn't seem like too terrible an idea. But together things begin 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 budget you MUST be bringing in approximately $70K. 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 eyeball's in debt. Most people don't make $70K and most people have all kinds of oddball expenditures that aren't outlined on the above budget. In order to know where you can cut back, you have to know what you have.

My assignment to you folks out there reading this is to do this very first step. Make a budget and BE HONEST - it will do you no good if it isn't accurate. Once we get this done we will be talking about such things and debt equity and discretionary spending. Let's get our budgets prepared so we can begin working on a plan to GET DEBT FREE!!!