This article is a continuation of a two part series on a simple but effective budget plan to fight debt.
7. Fun Stuff. This is the items you do for entertainment or relaxing. Could be a night on the town, fast food when running to the next sports practice, travel, or other items that may actually make life worth living some days. It is vital that you don’t think of this category in a negative light, it is important; just make sure to keep track of your spending. In fact, like food diet don’t’ work if you take out ALL the tasty food, money “diets” won’t work if there is no room to treat yourself, reward yourself for the hard work in all the other categories.
8. Insurance, All types of insurance, health, life, homeowners, renters, auto or any other forms of insurance.
9. Miscellaneous, This is what doesn’t fall under everything else. The most important item to put here is your personal debt. This includes your payments to debt such as credit cards or personal loans.
10. Tired of working for the man expenses, This is for the category of expenses to apply to your business, savings or investment expenses.
These folder and catagories help to keep you organized when tax time rolls around. You’re not done yet. Setting up your plan is just the first step. The next important step is to track your money from the moment you spend it. So copy down the categories and put them in your pocket or purse.
Every time you make a purchase check that receipt to make sure the charges are correct. Then pull out the list with categories, find which category the debt is from and write the category on the receipt. When your home at night, gather all your receipts and file them in the correct category folder.
Now go and balance your account, yes do this every night. After a while it will only take a few minutes out of your day. This will not only give you a clear understanding of your debt load, it helps you develop a plan to eliminate debt and start living life with less stress.
It also gives you a sense of oneness with your money, a sense of power. Because you will start to see exactly where all your money goes. Too many of us don’t know because we’re too stressed out at the thought of finding out. If you start doing this budget plan your have a clear picture of your cash flow and debt. But debt will not stop if you don’t quit buying that big screen television or visiting that expensive spa every month to de-stress yourself from all that credit card debt you accumulated. You have to start paying the debt down, and then when your rainy day fund is large and you are not buried in debt you can take that dream vacation.
In the mean time don’t forget you have the category of Fun Stuff and those are micro mini vacations. Learn to enjoy and savor your moments out, even if it’s fast food. It isn’t going to be easy, but it is going to be very, very rewarding and empowering.
When you start paying off that debt, start with the small debt first, apply all you can to it. When that debt is paid off, take all that money and apply it to the next highest debt, plus that debts amount you’re paying. Before you know it there will be light at the end of the tunnel. You’ll feel weight lifting off you, weight you may not even realize has been holding you down.
Hang in there, watch your money and make your money work for you, high debt only means your money works for the mortgage company and works for the credit card companies, not you. You earned that money; the banks just want to separate you from your money. Quit letting your money work for the credit card companies, the mortgage company and put it to work for you. Start saving and investing today.
This might seem like a boring tedious process, but these steps have been proven put many people on the path to wealth and freedom so take heed and start today.
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