No matter who you are or what you earn, a monthly budget is your best tool for getting out of debt and growing your wealth.
It puts you in control of your money by showing exactly where every dollar goes. Ready to take charge? Here’s what to do next.
Why budgeting is the key to getting out of debt
A budget helps you get moving toward a debt-free life …. think of it like a accelerator pedal in a car. Once you start budgeting, you’ll find more money you can use to pay off debt faster while keeping you on track with your other expenses.
You’ll shift from wondering where your money went to having full control of your finances!
Step 1. List out your debt
List all of your monthly expenses including debt and loan payments.
You’ll need this for step 2.
Step 2. Enter your expenses
Enter your in your expenses to a spreadsheet like the one found here: https://moneysmart.gov.au/budgeting/budget-planner
Step 3. Attack your debt from small to large
Start attacking your debt from the smallest to the largest until all of your debt is paid off. You’ll make a start to no more debt payments! That’ll be a huge relief!
Ever set a goal that was doomed from the start? Big goals are great, but they’ve got to be realistic. Same goes for your budget.
Don’t plan to spend $0 on presents, if Christmas is coming up. Do challenge yourself where you can though … like skipping eating out for a month and putting that money toward your goal.
When you keep it real, you set yourself up for success instead of failure.
Step 4. Check your calendar
Your wedding anniversary? The car registration that is due next month? Yep, it’s on the calendar.
A lot of “surprise” expenses aren’t surprises … they’re just ones you didn’t plan for.
So, check your social calendar before you make your budget for the month.
Be sure to budget for the real stuff coming up, not just the basics.
Step 5. Search for more money
Once you start budgeting, you may find extra money available to put toward paying off your debt. Often there will be subscriptions that you have forgotten about and that you can close down, putting more money in your pocket.
Step 6. Set up automation
Budgeting is how you can take control of your money and automation can help make sure that things go according to your plan.
Set up automatic transfers for regular bills, savings and your emergency funds so that your money moves to where you want it to as soon as your pay check hits.
It keeps things on track and from forgetting the essentials. It also removes the temptation to spend what you have set aside for your goals.
Step 7. Learn to say no or not just yet
Your budget doesn’t always say “no way.” but it often says “not right now.” … and that’s okay.
Instead of giving in to impulse buys, practice saving up, paying in cash, and staying focused on your goals.
Sometimes, you do have to say no. Saying no to spending now means saying yes to bigger wins later.
Step 8. Review your budget
Play around with your budget. Making it 100% your own is key to helping you go from where you are right now to where you want to be.
Everyone’s monthly budget is unique, and yours will be too. Perhaps you have renovation expenses or you are saving for a holiday.
Step 9. Find accountability
Want to win with money faster? Don’t go it alone. Get an accountability partner … someone who’ll cheer you on and call you out when needed.
If you’re married, you’ve got a built-in teammate.
If not, ask a friend or family member who’ll keep it real with you.
Check in every month to review your budget and set goals.
A good budget meeting keeps you focused, honest and encouraged.
There’s no weakness in asking for help … and you really will go farther with someone in your corner.
Step 10. Celebrate the wins!
Sticking to your budget isn’t always easy. So, when you do it, celebrate it! Stayed under your grocery budget? Paid off a credit card? Skipped takeout for a whole month? That’s a win!
Give yourself a high five, tell your accountability partner, and do a happy dance. Celebrating progress keeps you motivated and reminds you why this whole budgeting thing is so worth it.
Need more guidance? We’ve got you covered!
Book in a financial planning session and we’ll help you with both budgeting and paying off debt