One of the best ways to structure your finances in order to eliminate outstanding debt problems is to develop a comprehensive monthly budget that captures all of your incoming finances and outgoing expenses. Using a monthly budget allows you to identify problem areas in your finances, and makes it easy to allocate additional funds each month for use in debt settlement.

Although many of us find it difficult to make a budget we are able to stick with, following these 6 steps to making a budget that actually works will help you take back control of your finances:

1. Develop Your Monthly Budget: Setup a monthly budget using a spreadsheet or other software, or simply get it down by hand in a notebook. Capture your family’s total income and total monthly expenses, including taxes, rent/mortgage, utilities, food and clothing, and entertainment. Be sure to also budget for periodic expenses such as car repair, vacations, and birthday gifts. The more detailed you can make the budget, the more accurate your planning will be.
2. Do the Math: Compare your total monthly income with total monthly expenses to see how the numbers play out. Do you end up with a positive number? Great! You can begin using this amount each month to resolve your debts. Do you end up with a negative number? This is a problem. It means your living expenses exceed your total income.
3. Balance the Numbers: If you have a negative number, or budget deficit, identify ways to balance your income and expenses so that you wind up with a positive number each month. Begin by cutting monthly expenses that you can live without; dinner with friends, cable television, magazine subscriptions, etc.
4. Break Old Spending Habits: Stopping off for that morning coffee on the way to work each morning can cost as much as $100 a month, while making coffee at home costs a fraction of this amount. It is always difficult to make changes to our accustomed lifestyle, but by altering your spending habits you can come up with a strategy to make sure you have a positive cash flow each month rather than negative.
5. Evaluate Your Progress: Place all your income and expenses for previous months into your budget to see how you are doing. Do you need to make additional changes in order come out ahead? Are you saving more each month than is completely necessary? Developing a budget does not mean you are handcuffed to it. Changes in your life, either positive or negative, can affect your budget in many different ways. Be sure to reevaluate your budget periodically to make sure your priorities are being met.
6. Stick to the Plan: The only way a budget actually works is if you discipline yourself to strictly adhere to it. It is all too easy to say “Well I can afford it just this once”, but this mentality can quickly lead back to old spending habits. Keep in mind your long-term goals, and stick with the plan. Before you know it, you will be debt free and on your way to financial freedom.

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5. The 3 Secrets to Completing a Debt Settlement Program