Budget Your Way to Financial Health
It may take some work, but it is possible to live debt-free. Use these tips and you’ll be on your way to being financially healthy.
Budget Your Way to Financial Health
It may take some work, but it is possible to live debt-free. Use these tips and you’ll be on your way to being financially healthy.
Get out of debt
Carrying too much debt can be an overwhelming burden. But with some hard work, you can lighten your debt load. Focus on paying off credit card bills (start paying the one with the highest interest rate or the highest balance first).
Track your spending
You might be dining out or stopping at the coffee shop more than you realize. Save your receipts and categorize them accordingly (e.g., groceries, dinner, entertainment). Do this for one month before creating a budget—this will help you see the areas that need improvement.
Make a budget
Tracking what you spend will help you know what areas need attention and will give you direction for managing your money and debt. Budgeting can bring your spending habits in line with your income, so you can focus on saving more money each month.
Switch to an envelope system
Instead of using credit cards, try putting cash in envelopes each week or month for specific categories such as groceries, entertainment, or gas. The key is to be honest—if you’ve run out of money in the entertainment envelope, don’t borrow from another one. The purpose of the envelopes is to control your spending.
Build an emergency fund
Set money aside for unexpected medical bills, home and car repairs, or unemployment. Ideally, you should build your fund to cover living expenses for six months.
References:
debt.org/advice/how-to-get-out-of-debt/
daveramsey.com/blog/envelope-system-explained
calcxml.com/do/home
Related: 6 Ideas to Save Money Everyday
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