A budget is an extremely important tool to help you stay on top of your spending to ensure you do not go into debt. For those individuals who are already in debt, a budget will help put spending habits into perspective. Change is a lengthy and difficult process. It is common to feel hopeless, impossible or even deprived. However, like in the story “The Tortoise and the Hare”, if you work slowly and steadily, you can achieve what you put your mind to. Don’t look at solving your debt problems as you would dieting. “Diets” generally do not work. Subtle changes over time will result in long term habits and eventually financial peace of mind.

One thing Franklin Covey, many life coaches, and weight loss books have in common is the first thing they ask you to do when you want to make a change is to keep a journal. Our goal is to become free of debt. Jot down every living expense that you owe. We use a white board above our desk. You could use software programs or paper and a pencil. Living expenses may include: rent/mortgage, house and car insurance, security service, pest service, electric company, gas company, water, sewage, gas for your car, cell and/or home phone, cable, internet, food, entertainment, baby, online services such video/game rentals, credit cards, loans.

Now, list the amount you pay and the budgeted amount (what you can spend each month in each category based on your income). Some expenditures are fixed, the mortgage, insurance and city services, meaning they are the same amount every month; while others have a budgeted allotment we work toward changing such as the electric bill, food and gasoline. Be reasonable and realistic. If you are spending more than you are bringing in sit down and decide what items need to be eliminated, temporarily suspended or which services you can call to negotiate a better price.

For us, the majority of our money was escaping through nickel and dime purchases. Once we started to keep close tabs on what we were spending our money on we had a better idea how to tackle the problem. Which is why it is extremely beneficial to also begin keeping a log of every single purchase you make. Let me reiterate, EVERY single purchase cash and credit no matter how tiny or huge. If you spend most of your money eating out, try cutting out 1 to 2 outings a week and then go down from there. You won’t feel so deprived. How much you save depends on how aggressive you are. Review the list every week or monthly to help you “keep moving forward”.

I had a yoga teacher once that stressed “you only get back what you put in.” If you sacrifice a lot you will reach your goal faster.