# Having a Budget to Decrease Debt

Having a Budget to Decrease Debt

A budget can be one of the largest pushes in success towards paying off the mortgage loan early and I also venture to say that most Americans do not have any type of budget. Most millionaires, however, have budgets. The book The Millionaire Next Door has a large section dedicated to millionaires having budgets. There is also a quote found in the same book which says, and I am paraphrasing: “millionaires remain rich because they pretend they are poor and those who are poor remain so because they pretend they are rich.” If a very large percentage of the wealthy think that it is a good idea to have a budget – shouldn’t we?

We need to know how much money we have, truly how much money we have spent and how much we have left.
A budget not written down is just a dream. The budget can have different columns, computer programs or general ledgers. Whatever you use you will want to put your expenses, goals and actual money spent on paper.

When you create your budget you may start with four columns on your paper. The first two columns are for set bills and what was actually paid to the bill. For example you may have in the first column your mortgage payment of \$923.58 and in the second column you may have \$950 dollars is what you paid.

The Third and Fourth columns you could put the bills that will change, your goals, and what you actual pay. Groceries can be in column three with a goal of, \$350 and in column four the actual amount you paid of \$310 for the month.

Once you have your costs and expenses written down you want to track your expenses each week. You need to know how much you have left and how much you have spent.

As you track your expenses you can then take the total expenses and subtract this from your total income to find out how much you have left.

If you have a positive number left each month congratulations you can put that money towards more debt or other investments. If you have a negative amount left each month this number should tell you that you are getting further and further in debt each week and each month. Something needs to change.
To get out of debt we often need to make slight adjustments. If you have cable TV how much are you paying? Do you need the cost? If you took the cost of TV and paid towards debt what would happen. Now, you may want TV but are there items in you life that you can change to make a big effect towards your debt? Most of us have ways put more money to our debts.

Cons: It may take time and constant follow up to create a budget.

Pros: Budgeting can be one of the easiest and surest ways out from under debts that you may have. Budgeting creates knowledge of your finances that you will not find elsewhere and you can track unnecessary spending to get a hold of where your money is going. Remember, the largest percentages of millionaires use a budget – they have to be doing something right to be where they are.

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Great Budgeting Ideas

Thanks nstreet,

Having a budget down on paper or electronically does make it more real and more likely to stick to if you do utilize it.

After reading your post, I decided to search for at least a free version of a program that I could use both for personal and business budgeting. I located a site for Intuits' QuickBooks Simple Start 2008 which is FREE. The website is: http://quickbooks.intuit.com/product/accounting-software/free-accounting...

I hope this helps anyone looking to get their finances in order.

God Bless,

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Love, Light & Blessings,
Darlene

I Live..

I live my life by a budget now. I use Quickbooks as well as I have for years both for persoanl use and business.

It makes life so much simpler and with the budget I can see at a glance exactly where my assets and liabilites lye. It also allows mre to allocate funds for future purchases and follow the paper trail in a much more accurate way.

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Anita
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