Getting out of debt is like exercising, initially it costs us a lot of work, but as we move forward and see results, we strive to reach our goal.
In Resolve Your Debt we can only work with debts that exceed $ 35,000. This leaves many people out with debts of $ 10,000 to $ 20,000. That is why we decided to make this type of articles that will help you settle a smaller amount of debt through other methods that if you apply for sure you do it, they say that wanting is power, so I invite you to continue reading.
Most of us have made a budget without realizing it, it is a very useful tool and allows you to organize your expenses, be clear about your financial goals, especially knowing where your money is going.
Here the tool you need:
This time I will explain about the zero-sum budget , it is one of the most popular in the United States, which in addition to organizing your finances, if we know how to apply it, it could help you finish paying off your debts. It is a method to allocate everything, absolutely all your money to various purposes. You can do this with paper and pencil or in an excel, it depends on what suits you best.
The idea is that nothing should be left over, all money must be allocated, in a nutshell nothing should be left out. In the end, this budget fights ant expenses and stimulates savings. In order not to be confused it is necessary that you know how to determine the types of expenses you have and which are more important than others, also take into account your debts.
Get out of debt with a zero sum budget
This method will allow you to evaluate your personal finances, so just as you will find points in your favor it will also help you to have visibility on everything you have not done so well and you can create limits. You have no room for spontaneity in your finances which will help you a lot to see what you are spending your money on.
The idea is that you set yourself goals (cut expenses) that allow you to increase the amount available to reduce your debt little by little, so being a little larger amounts, you can contribute more money to your debt and thus the You’ll pay faster, it sounds like it’s not true, just remember that “every little action is worth it.”
How do you make a zero sum budget?
These are the steps to follow:
- Make a historical. Surely there are times when you don’t know where your money went, if you use a credit card, check your account statements, analyze your expenses made at least 2 months ago.
- Classify all the expenses you make. After the fright of seeing how the money is going, try to leave out all those expenses that you found and that are definitely unnecessary, then start classifying the others, first define if they are fixed or variable, then put something like: work , entertainment, transportation, meals, services, debt payment, etc.
- Start determining your expenses for the month.
- On an excel sheet or a sheet of paper place your monthly income at the top, if it is not a fixed income, then place a minimum estimate. Then, start writing all the expenses you expect for this month, remember to go by categories.
- Assign special fields. If you have any objective in mind, such as that trip to Paris that you so long for, you want to start saving, or also to get out of debts that are small but that are tormenting you, among others, you decide what you want to add.
- Distribute your money! It is time to make accounts, all your income must be distributed among all categories, you can realize that you have done well when the amount of savings or debt is more than you expected, this means that you possibly cut in a way Correct unnecessary expenses. You should not spare anything without assigning and if this happens remember that it is best to place it in the heading of savings or debt .
Some tips for this to work:
- ALL budget. Do not leave anything out of this budget if you want it to work, try that from the beginning you respect what you already wrote on it.
- Overvalue variable expenses. It is better that over what is missing, estimate 5% for these expenses so they will not take you by surprise, in case the payment is less, that surplus must be placed in the savings or debt part.
- Did you have to spend on the week? If for some reason you had to disburse money, then record it in your budget and try to keep it inside without problems.
- If you can’t afford it, you can’t buy it. This is your mantra from now on, if you want something, then save and pay the price in full.