Budgeting Money
Living Debt Free

This article on budgeting money helps you develop strategies and creative ways to help in living debt free. You will see that your personal spending plan will give you that light at the end of the tunnel, knowing that real freedom is at hand!

Previously, you learned that properly executed, living on a budget is a good boundary that brings incredible financial freedom.

Time to Get Busy

Now for some in the trenches practical stuff. Ready? Let's get digging.

Get into the habit of saving receipts and marking all of your expenses either in an envelope budget system, on the computer with free or paid software. Go to the budgeting tools page for an explanation of these and other helpful resources. You cannot realistically go any further (indeed the rest of this article might not make much sense), without you first setting up your own personal spending plan. Go ahead. I will be here when you are ready.

Whichever budgeting money system you use, physically track each expense in its proper category. When you do that, here is what happens. After about a month you will look back and say, "I spent $182 on coffee?!? How did my air conditioning cost $300?

You start to see different strategies for budgeting money with the goal of living debt free.

Here Comes that Light

After three months, you begin setting a track record of your financial lifestyle. You can do some math and average out the three months since by nature expenses fluctuate for a myriad of reasons. For instance if you spend $1500 on food over a three month period, your average per month is $500.

At the six month mark, you are now comfortable with your system and have begun reducing expenses in some obvious ways. Well, at least obvious to you.

Remember that each family (or individual) budget is different and will reflect the chosen lifestyle.

Now after one year of tracking expenses, you will have a realistic view of your average monthly spending habits. Why a year? There are periodic expenses that come maybe only once or twice a year, or every other month like my garbage bill. So, a $1200 car insurance bill you pay once per year is actually budgeted at $100 per month. This means you need to save $100 every month to pay off that periodic expense (insurance) when it comes due. Same goes with every other expenses that is not paid monthly.

This is how budgeting money works. You put aside what it takes to pay for each of your expenses, so when it is time to purchase those items or services you are ready! No more worrying about reducing credit card debt. No more frustrations and anxiety. Freedom!

Sometimes Life Happens

As long as your income or lifestyle does not change dramatically, you now have a realistic projection for the next year. But of course, life happens and so many times it affects your budgeting money. A marriage, a new child, a job change, inflation, etc., all seem to work against you in maintaining a personal budget that works.

When life happens, simply adjust your free household budget worksheet to reflect the new changes and move on. Now hold on. Do not simply change numbers to make it look good. Doing so will cause your budget to fail, you will get frustrated and blame it all on me. I cannot take that kind of pressure. Remember my caveat: Keep it simple and keep it realistic.

Do not fret. Getting a handle on finances is a process that takes time and effort. It is centered on your attitude and commitment to a way of life ... frugal living and effective stewardship.

What's Next?

The next article in this making a budget series gives you a slightly different perspective on creating a household budget.

Return from Budgeting Money to
Household Budget Made Easy.