Help Me Get Out Of Debt!
or, Help Me Make A Budget
or, Help Me Be More Financially Responsible

Are you in debt? Would you like to get out of debt? If you are like many people, you have one or two mortgages, one or two car loans and several high-interest credit cards. At the end of the month, when you've paid all your bills, you have very little or no money left over. In addition, you probably aren't saving much if any for retirement and you probably don't have any idea how much you'll have when you do retire. Perhaps you are still paying off college loans as well. It is also likely that every year you are getting more in debt. Things may look grim. But there is good news: you don't have to be in debt forever. There are many things you can do right now to get a handle on your money. All it takes is a little self-discipline.

First things first: you cannot manage that which you cannot count. Have you ever stopped to consider how infrequently you count money that you spend? For some reason many of us can comfortably ignore counting what goes out of our wallet as we acquire things we believe we have to have. This weakness is a major contributor to people getting into debt. So the first thing you have to do to get out of debt is learn to count every penny you spend. You should also make a note of what you spend that money to buy. You may be surprised how much money you're spending on things you don't really need or even want.

One good way to track your spending is by using a piece of software (like Quicken or Microsoft Money (which comes free on many computers)), or creating a spreadsheet that contains an itemized list of all the things you pay for in a given month: gas, food, groceries, phone bill, credit card bills, mortgage, car payment. It's very important that you don't miss any expenditures. You might consider keeping all your receipts or a small notepad to keep track of what you're spending. The total of all expenditures we'll call your 'outgo'.

Next you list all of your sources of income for a given month. This might just be one line-item; your paycheck. But if you have more than one job, or have different sources of income like child support, alimony, dividends, etc. you'll have more. List them all. The total of all of these we'll call your 'income'.

Now, subtract 'outgo' from 'income'. We'll call this amount 'leftover'. If 'leftover' is negative number that means you're spending more than you earn and you're going more into debt every month. If 'leftover' is zero, then you're spending exactly what you earn which is better. If 'leftover' is a positive number that means you are spending less than you earn with is excellent! If you find that you don't have the self-discipline to do this simple exercise, chances are good you aren't very motivated to get out of debt.

Also keep in mind that some months are worse than others because you get an unexpected expense that creates a big hole. For example, you may have to pay a car insurance bill, or get new tires. So even if this month looks good, next month might not.

Now that you have a better idea about income and expenses, the next step is to...

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