Now that you’ve had a chance to look at how much you truly owe, you may need a second to catch your breath. I know I did. I think I needed a few days to really analyze the gravity of my situation and come to grips with the poor decision making that led me to this point. I wondered if any efforts at this point would be futile. Even if you could crawl under a rock, the debt would still be waiting for you when you came out for air.
Time to deal with it head on!
So, where do you go from here? Time to create a budget!
Yes, the dreaded B word. As with many of the steps that we explore, I’m going require that you change your mind frame. Think of a budget as you telling your money where to go, so that you don’t have to looking up and wonder where it went.
I will provide a quick and easy outline of a basic budget sheet. I don’t care if you use mine, but if you want to reach you goals, you need to use one! Tweak the one I’m proving so that it fits your life or create your own from scratch–either way, you cannot move forward without it.
| Income | Expenses | ||
| Monthly Gross Earnings | Housing | ||
| Subtract 28% for average withholdings | Utilities | ||
| Monthly net income | Medical Insurance | ||
| Student Loans | |||
| Entertainment | |||
| Monthly net income | Transportation Expenses | ||
| Subtract monthly expenses | Grocery Items | ||
| Results | Should be zero!!* | Emergency Savings | Goal is $1000 |
| Clothing | |||
| Child Care | |||
| Debt Repayment | |||
| Car Debt/Gas | |||
*why zero? because you should have assigned each and every dollar a home under the expense column. Tell you money where to go! You are in control!!
Emergency fund: $1000 for annual income greater than 20K—-$500 for annual income under 20K.
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