How To Get Debt Free By Budgeting Your Money
by Richard DFO Hijinx

Alright, so you somehow wandered upon Become Debt Free Online and are probably thinking about how in the world to get out from underneath a mountain of debt. This is a situation that baffles and eludes many people but the answer is much easier than the actions putting the answer in to motion. Though it is difficult to become debt free, it CAN be done and we will guide you on the journey there.

One of the first huge steps in becoming debt free is in knowing where you are financially. Knowing where you are financially means you HAVE TO draw up a financial budget. Drawing up a budget is EXTREMELY important to your long-term success. For you to get debt free you must know what monthly income you have coming in and what monthly expenses you have going out every month. My personal budgets take this one step further; you also must take into account expenses that are certain to occur annually, such as license registrations.

What typically goes in a financial budget? Below, you will see what a typical expense budget may look like for an average American.

Rent/Mortgage - $1000

Auto Insurance - $125

Auto Loan - $405

Auto Loan #2 - $295

Life Insurance - $66

Water - $40

Electricity - $79

Garbage - $20

Natural Gas - $121

Childcare - $505+

Gasoline - $295

Groceries - $1000

Telephone - $41

Cable - $49

Internet - $50

Cell Phone - $101

Credit Card - $100

Student Loans - $100+

Total - $4385++

Looking at the financial budget outlined above, each item taken individually does not seem like too bad an idea. But taken together things start to get out of hand. In the above financial budget we have nearly $4400 of monthly expenses, AFTER taxes. In order to BREAK EVEN on this kind of personal budget you MUST be raking in about $70,000 per year. 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 eyeballs in debt. Most people don't make $70K,$70,000 and most people have all kinds of one off 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. After we get this done we will be talking about such things as debt equity and discretionary spending. Let us get our financial budgets prepared so we can begin working on a plan to BECOME DEBT FREE!!!

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