Living off a budget takes some time and planning, but it will be the best decision that you and your family could ever make. Not only will it help you if you are struggling with debt, but a budget can also guide you to financial goals (like a new car, a dream vacation, or even a new home.).
The first step will take about a month. You need to keep a record of everything (and I mean literally everything) that you spend AND what you spend it on. If you buy a soda for one dollar, write it down – it could be groceries or entertainment or even personal. If you put change in the meter, write it down – it could be work related or auto costs. Be methodical when you make your list of spending. It could be what determines whether your budget will be a glowing success, or a dismal failure.
Take the list you made and break it down into categories. Make a list of MUST PAYS – tithe (I’m a firm believer in giving God his first), mortgage, internet, phone, cell phone, water, electric, garbage, television, alarm, car insurance, and flood insurance. The next thing is the NEED to pays – gas, groceries, pets, clothes, car, education (we homeschool). Then finally there is the WANT to pays – entertainment, gifts, savings, and misc.
Now total up how much you spend in each category. If your outgoing amount is less than what you are bringing in, then it is time to make some changes. Either you have to bring in more money or else you have to cut the fat out of your budget. Start at the bottom of your list – with the wants – and cut until the outgoing is less than the income. It might hurt for a little while, be eventually you will find your way out.