The first step to cutting down your debt is to come up with a written plan of action, otherwise known as a budget. Many people dislike the word budget because of the limitations it implies. However, a budget can be whatever you want it to be.
The important thing is, to make sure your family is in agreement on everything. Once everyone knows where the money is going, there is very little room for money fights to creep in.
This is an absolute necessity when it comes to starting a budget. Your whole family has to be on the same page, otherwise it’s useless and won’t work. At your first meeting go over the bills, and decide what your priorities are. Everyone has a say and should be involved in the creation of the written plan. This should be done before the first of the next month so you are starting out fresh. The first few months you will need to have quite a few family meetings and this is ok. Do whatever it takes to keep each person involved.
Determine exactly how much money comes in each month and how you will divide it up amongst all the bills. Don’t forget to include things like groceries, gas, and simply miscellaneous or “fun” money. Every dollar has to have a name. There are a ton of budgeting forms and resources online that can help you get started.
List Your Expenses
This is the hardest and scariest part for some people. That’s especially true if you haven’t paid much attention to your money situation in a while. Take control and start being responsible for your situation. As scary as it is, you won’t be sorry you did. This is your first step to financial freedom.
Come up with a list of financial goals each one of you has for the future. This can be anything from paying off the house, to saving up and buying a new car, or taking a vacation to Hawaii. Don’t leave anything out. This allows you to see past the current situation and look towards a future filled with hope and excitement.
When it comes to debt, there is no easy way out. If you are desperate for a change, this is the place to start. A written plan of action can be started today. You don’t need training, or experience. All you need is the will to start and the discipline to stick with it.
Don’t worry about being perfect or getting it right the first time. Just make sure your whole family is involved so that it doesn’t become a one-sided budget, but more of a family plan.