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How to get out of debt with good budgeting

By Administrator 24 July, 2013

Poor budgeting can worsen your debt problems. Creating a strict but realistic budget should be the first task for anyone in debt. All debt solutions require strict discipline and if you don’t stick to your budget you are unlikely to achieve your goal of becoming debt free.

In this article we talk about some tips as to what you should include in your budget.

A good budget has several important components. It must include all of your usual expenses, but it also needs to provide flexibility for unanticipated expenses (like medical expenses & car repairs etc). Unless you set aside some extra money for unanticipated expenses you are only going to disappoint yourself when you blow your budget.

It is also important to remember to allow for expenses which usually get billed on a quarterly or annual basis. Utilities such as council rates, electricity and gas are usually billed quarterly.  Memberships (such as trade licences, professional registrations, sports registrations, roadside assist memberships etc) and some insurance policies are billed annually.  It is important that you convert these expenses into weekly, fortnightly or monthly amounts so you keep enough cash to one side to pay for these when they get billed.  So, if you get paid weekly, then we recommend that you set up a weekly budget and convert all expenses into weekly amounts as well.

Every budget also needs to make allowances for leisure and entertainment.  You are unlikely to stick to your budget if you feel “tied down” to a bland and unsatisfying lifestyle.  But remember, you should only “treat yourself” if you have achieved the goals set out in your budget.

At Debt Free Australia, we help people create strict but achievable budgets as part of our debt solution service. Our experience has shown us that people who follow a strict budget are far more successful in achieving their goals in becoming debt free.

We have experienced personal debt consultants who can help you.  Call now on 1800 676 598 to arrange a free debt assessment.