Many people constantly complain about being in debt, but when you ask: do you have a budget, do you know how much you owe, or when you suggest they cut back on expenses they look at you as if you are speaking a foreign language, or they just plain out refuse. I am always amazed at this; how can you ever get out of debt if you don't change your mindset and if you aren't willing to work hard and make sacrifices? There is no quick fix or cure-all to get out of debt. It takes a long time to get in debt and you will not get out of debt overnight.



Many people do not know how to create a budget for themselves and many don't even know where to start. Luckily, I was taught at an early age how to create a budget for myself. I knew how much money I spent and how much I had left. This skill helped me when I became an adult and got into debt. How did that happen, you say? Well, although I knew how to budget my money I didn't have a clue about how credit cards worked. I thought it was free money but that is another article.

Anyway, the first step to getting out of debt is creating a budget for yourself. The basic premise for creating a budget is to know what you have coming in and what you have going out, in other words, how much money you bring home and how many expenses you have (creditors, loans, utilities, cell phone, day care, dry cleaners, etc.). Make the budget flexible so you have room for unexpected expenses such as house repairs or car repairs. If you don't have an emergency fund or savings to cover these expenses you can readily see in your budget what areas you can reduce expenses to get money to pay for those unexpected expenses.

Having a budget makes you responsible and accountable for your finances. Most people don't think about how much money they spend per week or per month but when you see all of your expenses written down on paper it provides an awareness of your spending habits.

Once you create your budget you can easily see if you have too many expenses or if your money is not being managed properly. The easiest task to accomplish is determining if you have too many expenses, you simply cut down on your expenses and you will have additional money. To pay down some of your debts, reduce some expenses such as:

* bring your lunch to work

* cancel your pager cable or cell phone service or get the cheapest plan available

* carpool, catch the subway or bus to work

* use coupons when buying groceries or shop at wholesale stores like Costco or Sam's Club

* sell unused items at a yard sale or donate to charity.

If you are mismanaging your money or spending your money on wants instead of needs that is a little harder to overcome because this takes willpower and discipline. It takes 23 days to develop a habit so you have to practice good spending habits everyday. Each week it will get easier and easier. It also helps to develop financial goals for yourself, such as you want to get out of debt within a specific time period, you want to buy a house, take a vacation, whatever your goals are write them down and give yourself a target date.

Don't get alarmed if you miss your target date for a financial goal because your main focus is changing your spending habits. Remind yourself that you are working toward achieving your goals. It may take some time, but I know you can do it. Being debt-free is worth the hard work and discipline required. Financial freedom is so sweet. Just think how nice it would be to wake up each morning: not worrying about having to pay a creditor, not worrying about creditors calling your house asking for a payment, being able to see yourself in a house or buying investment property or taking a vacation every year.

So many things are possible when you are debt-free and live on a budget. I make a decent salary and only have one bill - my mortgage - and I still put myself on a budget every payday. Sometimes people ask me why I worry about money and I say I always like to be prepared because you never know what may happen.