Do You Have A Debt Buster Budget?

Increase your Income by Implementing a Budget 

Implementing a budget into your household might seem like an obvious thing to do. Most people however don’t feel the need to use spreadsheets, balance their checkbooks, or write out a planned budget. The majority of people will tell you that they don’t feel like they are mathematically inclined to be able to implement a budget. 

Even if you need to recruit help, it is in your best interest to make an effort to create a household budget that tracks your income versus your expenses. A budget should contain repeated monthly expenses, like utility bills, and you should try to predict possible increases to both your income and expenses. When planning your budget try to allow money for the unexpected things that pop up. 

If you do not feel like you are going to be comfortable using spreadsheet software to track your budget then you can just use a legal pad. If you think the software will come in handy you can find it free at either http://www.openoffice.org/ for Open Office or http://docs.google.com/ for Google Documents and Spreadsheets.Take your sheet and divide it into two columns. In the left column list your income, in the right list all monthly expenses. In your expense column include your major constant bills like your mortgage, and also grocery and gas bills. If you are able, add an extra 10% for any unforeseen expenses. 

You will also need an area to add a few different types of scenarios. Make another budget that  doesn’t add the payments on your credit cards, remove your auto loan and take out 25% of your discretionary spending. Add those three amounts separately.The amount for those three items is what you could actually avoid paying on a monthly basis if you were debt free. If you look, you could be paying over 10% of your monthly income to cost that can be avoided. For some, this percentage could be even larger. 

Only you know if this 10% of your monthly expenses is worth having and paying the interest on it now, or if you could save those fees by waiting a little longer and pay cash for the items. But here’s a thought: If you saved the 10% of the APR on a $2000 item you would have $110 extra in a year. If you are only paying the minimum on that balance, it accumulates to even more. So are you willing to pay at least $110 more for the item then if you had just waited to save the money? 

How you decide to spend your money is ultimately up to you, but by sitting down and planning a budget you will be able to see exactly where you can shave some of your expenses. There is nothing like being debt free either.