What does it take to break free from your debts? What do you think? It’s money right?

Well no!! It’s a budget that can help you to be debt free.

But there’s one big problem, when you are in debts. Your head can’t think right and straight. Too many thoughts, too many debts, utter confusion, and you seem to be doomed by your own money mistakes!
Credit cards seem to be flying all around you like honeybees with their debts like poisonous stings.
Some even have payday loans to take care, while others are busy fighting student loans.
And, don’t tell about those demotivated cutie femmes, who have a mortgage or an auto loan to defeat!!

In such devastating times, the last thing you want to do is keep your debts aside and think about a budget. You might feel the rush to use up your whole paycheck to wash all of your debts!

And that’s where we make the biggest blunder of all….

Remember it’s all about right channeling of your money. If you can’t pull the rope from both ends, one end being income and the other the expense, then the rope will fall.

Here’s how to start a budget when you are in debt:

  • First understand how much money you need to clear your debts:

This part is the most crucial and fundamental part for you to formulate a budget.

Your debt amounts will impact your budget to a great extent. If you don’t know how much is about to go out, then you will have no idea how much to store.

Moreover, prioritize your debts. Obviously at the first glance secured debts seem to carry the highest importance, but guess what; it’s the unsecured debts that should be your primary affair!

Secured debts like mortgages or auto loans are long term accounts, that you can’t get rid of whenever you want. They have a fixed set of terms, conditions and time limits. Clearing a loan before the scheduled time can result into a penalty.

So, our concern is definitely unsecured debts or consumer debts. These include credit cards, personal loans, and anything else that’s not backed by a security.

Therefore, calculate all your debts, and get a clear number in your head, that this amount of money is what you need to clear all of your debts.

  • Second, list your regular expenses for each month:

Beside debts, we all have other expenses to deal with.

The best thing you can do is list all such expenses one by one as per their priority. Like groceries, utility bills, transportation costs, and all, are your first priority. You can’t live without doing these expenses. They comprise your livelihood.

Notably, these expenses are also flexible, and you can minimize them without much of a hassle. Everything depends on you. Say, you can avoid eating outs, or if needed stop using your car too much, and instead use public transports.

Also try to regulate energy consumption, so that you can save on your utility bills. These small changes that you will make, will save you a lot, which you can in turn use to make extra payments for your debts.

  • Allocate fixed amounts to all of your expenses:

Be predictive, responsible, and assign fixed values to all of your expenses. I understand that there’s always something called unexpected expenses in everyone’s life, but your aim should be to minimize them as much as you can. Probably that’s why you should save money for emergency expenses.
Also don’t miss out on the debt payments. Count them in as a part of your expenses.

See cutie, there’s nothing called a fixed budget as such! At least I don’t believe in it. I believe that you are the budget itself!! If you want, and if your decisions are right, then a budget is accomplished.

So, list all the expenses and write down the fixed values beside them. Once you are done, add them up and see whether or not it’s crossing your total income.

If your total expenses are falling under your income limit then your budget has played well!

Practically the aim of controlling your expenses, is to increase your savings. So with whatever amount is left after subtracting your expenses from income, you use it to do extra debt payments or satisfy your savings goal.

Now what if the budgeting itself is not enough, your debt payments are huge and are crossing your overall income?

This is when you feel injustice is being done to you.

But there’s a big time solution. Take help of a debt payoff calculator to see how much you can save on your debt payments, if your income is not consenting with your debt expenses.

You can also get a part time job, or an extra side hustle if you want to increase your income.

No matter whatever you do, you still have to budget your money for your own good! Else nothing can help you in the long run.

With this we come to the end of our discussion. Hope this article was of some help for your debt situation. Don’t forget to comment down below, for further advice and queries!!

Author Bio: Andy Masaki is a financial writer and blogger who specializes on the topic of debt. He frequently writes for the Oak View Law Group and is a active member of several online forums where he shares his tips on how to lead a financially independent life.

Visit our Money page to read more articles about money management.

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Black Men In America.com Administrator
Black Men In America.com is a popular website with a focus on black men. Approximately 45% of our site visitors are women. According to Alexa Internet and Ranking.com, Black Men In America.com is consistently ranked as one of the Top 10 most popular web sites (online community) on the Internet in the Ethnic/African/African-American category. Although our focus is on black men, we welcome all people, points of views and perspectives. Please do not use this site to post or transmit any unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane or indecent information of any kind, including without limitation any transmissions constituting or encouraging conduct that would constitute a criminal offense, give rise to civil liability or otherwise violate any local, state, national or international law. You alone are responsible for the material you post.
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