Financial 4 Walls to Become Debt-Free

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Developing a financial plan is crucial if you want to become debt-free. In order to create a financial plan, you need to first determine what your expenses are each month. Write down the percentage of each category that is more than your take-home pay. Once you’ve calculated this, you can start reducing your spending and making more money. This will make you feel better and enable you to move out of survival mode.

While planning a budget is an essential part of managing your money, it’s also important to prioritize what you spend your money on. Your highest priorities should be at the top of your list. When making a budget, start with the most important expenses and then cut out the rest. As a rule of thumb, you should spend between 10 to 12 percent of your take-home pay on food. Depending on the size of your family, you may need to increase or decrease your food budget.

Next, make sure you prioritize your utility costs. Typically, utilities account for five to 10 percent of your budget. These utilities include electricity, water, sewer, and garbage. These utilities are important because they keep your home comfortable in hot and cold weather. You can find inexpensive air conditioners on Craigslist and conserve energy by turning off lights when not in use. Another great way to save money on your utilities is to take shorter showers and limit the amount of electricity you use.

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