Simple Plan: Getting Out Of Debt Is Rooted In Selflessness And Simplicity

More times than not, when you take a look at those individuals who struggle with debt, you can pinpoint the problem rather quickly. Constructing a prudent, intelligent financially sound person starts with the foundation that often is devoid the moment you spend a few minutes with an individual who struggles with debt. That “foundation” is a budget, something that easily measures your expenses versus your income and how you spend your money. Sounds easy enough, right? The issue with budgets is twofold: the ones who have them but couldn't tell you the first thing about them or, worse yet, the ones who don't have them at all. Recently, a person asked me quite simply how they could save money over the next six months, to which I asked a question that seemed rudimentary and common. “Do you have a budget?” This person replied, “yes, I do.” So far so good, but the follow-up question wasn't exactly met with rave reviews. I asked, “do you spend more than you make?” The response, “I don't know, probably.” When it comes to matters of money, there are no minced words or uncertainty. Money is black and white and so too should be your budget. The two variables that cannot be manipulated or questioned is how much you're bringing in versus what's going out. If the latter is more than the former, your budget isn't up to par. Even more ridiculous is the person mentioned above who has a budget but doesn't either know what that means per say or just chooses to ignore for reasons that only they can understand. You can argue that having a budget and not knowing the ins and outs of it is no different than not having one at all. The budget itself is only as good as the person who follows it. Aside from not following or having a budget, one of the bigger missteps when it comes to money and tracking it is the easily forgotten incidental expenses that often plague even the most ardent and savvy money manager. For instance, you may have, after your bills are paid, approximately $1,000 extra cash to stick into some savings account. But ask yourself an important question: did you remember to include items such as your daily coffee, lunch on the go three times per week or an allowance for things like clothing, tolls to and from work or gas? Having a budget is hardly full proof if the person behind it isn't willing to adjust it, monitor expenses closer than just the topical, monthly bills or pretend that it even exists.