How to eliminate all consumer debt including mortgage and reach financial freedom

(How to create a budget and stick with it)

It seems like an impossible task to accomplish for many people living from paycheck to paycheck, but it is not if you are willing to put in the effort. It is more common sense than anything else, spend less than you earn and save and invest the rest.

The first step in eliminating consumer debt is creating a monthly budget. The second step be disciplined and patient.

In order to create a budget you need to calculate all of your income and expenses. For one month, write them down and that will give a visual and more accurate picture of your financial situation and will show where you can cut corners and save money.

Your monthly income may include:
Salary
Pension
Alimony
Child support


Your monthly expenses may consist of:

Saving account or IRA (remember always pay yourself first)
Mortgage /rent
Car payment
Homeowners/renters insurance
Health Insurance
Pet care expenses
Auto Insurance
Utility bills, such as: electricity, gas, water, phone, cell phone, cable etc.
Other financial obligations such as: students loan, credit card, personal loan etc.
Education
Food
Clothing /Shoes
Emergency fund
Entertainment
Other
You may want to add or delete items from this list if they don’t apply to your personal situation.

The majority of expenses are fixed and recurrent from month to month for a long period of time (month, years and even longer). There is not much you can do to save money there, but it is a good idea to use automatic withdrawal from a checking account to pay those bills,

There are a number of expenses such as utilities and grocery bills where you can save money. When grocery shopping always:

1. make a list beforehand (no impulse buying)
2. shop in more than one store , compare choices and prices
3. join one of the clubs such as Costco, Sam’s Club and buy bigger quantities for a better per unit price
4. while in the store check the manager's specials sections (many grocery stores now offer manager's specials with substantial savings)
5. buy store brand instead of name brand
6. use coupons

If your personal financial situation is very serious and you really need to cut corners, cancel all non-essential services such as cable, cell phones, and newspaper/magazine subscriptions.

Do not buy anything unless it is absolutely necessary until your financial house is in order.

When it comes to credit cards, try to pay extra every month, and make sure you don’t use them unless you can pay them back at the end of that month.

Don’t be afraid to give up small pleasures (eating out, going to coffee shops, buying clothes when you don’t need it etc.) because this will ultimately lead to big savings, which will bring you to your overall goal of financial freedom.

For best budget planner visit:  https://money.strands.com/

For free budget spreadsheets visit: http://docs.google.com/

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