Getting out of debt when you are living off one income could be a stressful thought. Not to worry, there are small strategies you can follow that will allow you to figure out a game plan on how to get out of debt on one income without totally going crazy. This budget
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The first step in learning exactly where your budget stands is to do a budget breakdown. Here are the simple steps you can follow in order to execute a budget break down.
Based on these 3 necessary areas of your budget, you can begin to start a basic breakdown to see where your money is actually going each month.
Once you have all of your necessary bills written out, you are going to want to dive into your un-necessary spending. This can be a really eye-opening section of the budget.
This means any fun purchases, movies, drinks, out to eat expenses. To get an average of how much you are spending, make sure your purchases are added up that you made over the last 3 months.
Now, it’s time to let it sink in. You can now probably really start to see where your money is going each month.
In my course, The Debt Busting Budget, I also walk you through what percentage of your money should be going where each month. For example, if you are spending over 30% of your income on housing and housing expenses, you may need to re-evaluate your home or utility bills. Checkout the full course.
Now if you are struggling with debt, it’s time to get serious with yourself. You have reviewed your spending, now where can you create a little wiggle room in your budget?
Cutting the non-necessities out of your budget is crucial to creating extra money to help put toward debt. This could mean things like:
These little perks in life are great, but they are not necessary to your survival. Now, in my case, I am a daily gym goer and I homeschool. Therefore, my gym membership basically pays my sanity. It stays. If you are not a huge gym goer, but are still shelling out the dough each month for a membership, checkout these few posts that will give you some ideas on how to stay fit on a tighter budget:
There is an awesome app called Trim that will review your repeated spending and analyze your bills. They do this in order to instantly find you better deals!
Within 10 minutes of downloading Trim, they informed me that I could be saving over $20 per month on my internet bill. Something I had been suspecting was far too high!
The best part is that they will do all the negotiating for you!
Get charged way less for phone usage with an awesome company called Ting.
We currently have 3 lines and pay over $170 per month!!! Reduced the cost to $55 with Ting!
You choose your text message, talk minutes and data ahead of time and then share across all of your lines. The average phone payment per person is around $25 per month! PLUS, you can transfer your current phone number!
Here is a basic breakdown of budget percentages:
Use this budget calculator to see where you are falling in these categories.
Come up with some strategies on how to improve in the areas where you fall above the recommendated limit.
For us, we were spending far too much on our debts and our fun money. –Even though we weren’t having very much fun!
Another area many people (us included) need to reduce spending in is the “food” category. See how our family of 5 spends $100 per week.
Some other quick tips are:
Alright, WHEW, working a budget can be a lot of work but once you find ways to create some wiggle room in your budget, it is time to come up with a game plan for getting yourself out of debt.
My best recommendation for doing this is by sticking with Dave Ramsey’s Debt Snowball. You can watch my video here to get the full scoop on how the Debt Snowball works.
Now, when paying off debt, it is crucial that you stick with your lower spending budget. Get the full budget bundle here.
If you are working on getting out of debt and sticking to a budget, it is absolutely crucial that you continue working with your partner or spouse to make sure things continue working smoothly.
Sometimes this can be the hardest part but it is important to remember that you should be acting as a team!
In order to help keep things moving quickly, it’s a great idea to find ways to make additional cash where you can. Whatever extra money you are able to bring in and can put toward debt payoff if going to help a ton!
Here are my best suggestions for quick ways to start making extra money:
The fact that you are living on one income can actually be really beneficial for exactly this reason…any additional money you make is exactly that…additional! Bringing in a second income can only benefit you!