Recession Global

Alright, so you somehow come upon debt free and are likely thinking about how on earth to get out from underneath a pile of debt. This is a problem that baffles and eludes many people but the answer is much easier than the actions putting the answer in to motion. Though it is tough to become debt free, it CAN be done and we will guide you on the journey there.The first huge step in getting debt free is in knowing where you are financially. Knowing where you stand financially means you MUST create a financial budget. Creating a financial budget is VERY important to your success. In order to become debt free you must know what monthly income you have coming in and what monthly expenses you have going out every month. My personal budgets take this one step further; you also must account for expenses that are certain to occur annually, such as license registrations.You may be wondering what you may need to put into your budget. I have put together an example budget below for an average American.Rent/Mortgage - $995Auto Insurance - $120Auto Loan - $395Auto Loan #2 - $295Life Insurance - $65Water - $39Electricity - $81Garbage - $19Natural Gas - $119Childcare - $500+Gasoline - $300Groceries - $995Telephone - $41Cable - $49Internet - $51Cell Phone - $101Credit Card - $101Student Loans - $99+Total - $4385++As we begin to start looking at the budget outlined above, each item taken individually doesn't seem like too terrible an idea. But taken together things begin to spiral out of hand. Shown in the above example budget we see almost $4400 of monthly expenses, AFTER taxes. In order for us to be able to BREAK EVEN on this kind of budget we HAVE TO be bringing in approximately $70,000 per year. This budget doesn't even include various items such as children's doctor's visits, and all the other annual crap we haven't even addressed yet, like enrollment fees, the vehicle expenditures such as registrations and the one off mechanical failures that can cost a ton of money. It's no wonder people are up to their eyeballs in debt. Most people don't make $70K,$70,000 and most people have all kinds of one off expenditures that aren't accounted for on the above financial budget. In order to know where you can cut back, you have to know where your money is coming from and where it is going.My first assignment for you people out there going over this is to do this very first step. Make a budget and BE HONEST - it will do you no good if it isn't right. After we get this done we will be talking about such things as discretionary spending and debt equity. Let's get our financial budgets prepared so we can begin working on a plan to BECOME DEBT FREE!!!Richard DFO Hijinx has an article showing you how to create a financial budget