Most people avoid budgets like the plague. When mentioning a budget Ive heard comments such as, Isnt that for retired folks?, Theres no way I can stay on a budget! and A budget feels so limiting, like a diet: you see something you want and cant have it because of guilt, shame and restrictions. Yet we all know that restricting our food intake causes weight loss and restricting our spending habits can cause debt loss.

The Basics

Creating a budget to help you achieve debt elimination is not a difficult process. You need a piece of paper, a pen, copies of your bills and expenses, and a little time and determination.

For each line, estimate (in many cases your rates are set) your housing costs, utilities, food, clothing, transportation and vehicle costs, medical and/or family expenses, entertainment and online services, credit card payments and debt priorities, and lastly, other expenses.

After you have a clear picture of your monthly expenses, factor in your monthly gross with payroll deductions. Figure your set expenses, such as housing, food and utilities, and estimate your more flexible expenses, such as entertainment and clothing.

After you have allocated your money, apply all extra funds to pay ahead on your debts. In using your money toward debt reduction instead of treating yourself to another fancy dinner or extra pair of shoes, you can watch your debt dissolve quicker than you might imagine.

Reducing Debt

If you really want to reduce your debt, there is no better way than by tracking every single penny you spend and sticking to a realistic budget. By budgeting, you can easily find where your extra money is going and oftentimes, realize how you can save hundreds of dollars that can apply directly to your debts.

Online Resources

If you feel you need a little extra information and help on the budgeting process, there are hundreds of terrific online resources that can help you plan, budget and reduce your debt. From budget calculators and worksheets, to detailed software programs, research your options online for the one that best suits your needs.

Good Luck!

Creating a budget doesnt have to be a painful restricting process; it can put you in touch with your honest spending habits and be a rewarding experience that transforms many areas of your life.