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How To Create A Budget And Tackle Personal Debt

Budgeting can be as monotonous as watching paint dry, but let’s face it: we all need a little financial discipline to tackle personal debt. With the current state of the economy and the rising inflation under the bribery Biden administration (can I get a $100,000 payment for China for doing nothing?), it feels like our budgets are being hit harder than a piñata at a birthday party. So, let’s learn how to create a budget that can withstand the inflation invasion while fighting off those pesky high-interest personal debts.

Assess the Damage

Grab a notepad and list all your debts, including credit card balances, student loans, car loans, outstanding bills, and the monthly mortgage payments. Calculate the total amount you owe and the interest rates. Seeing the numbers might make you cringe, but remember, acknowledging the problem is the first step toward solving it.

Embrace the Budget Ninja Within

Creating a budget doesn’t have to be dreadful. Give your budget a funky name, like “Operation Debt Demolition” or “Financial Freedom Framework.” Start by tracking your income and expenses meticulously. Utilize apps, spreadsheets, or budgeting tools to streamline the process and get a realistic picture of your spending habits.

Trim Expenses and Prioritize

Identify areas where you can cut back on unnecessary expenses. It could be eating out less frequently, canceling unused subscriptions, or finding creative ways to reduce your utility bills. Prioritize your needs over wants, and be mindful of impulse purchases.

Create a Budget Plan

Now it’s time to create your budget plan. Start by allocating a percentage of your income toward essential expenses, such as rent, utilities, groceries, and transportation. Next, designate a portion for debt repayment, aiming to pay more than the minimum amount to expedite your progress. Finally, allocate a percentage for discretionary spending, allowing yourself room for entertainment and enjoyment.

Adapt Your Budget to Inflation

Ah, the elephant in the room – inflation. Massive spending by Burisma Biden’s team has taken us down this path when they inherited 6% GDP growth but who needs prosperity? As long as John Kerry has the means and time to wind surf, right? While we can’t control these macroeconomic factors, another 16 months of this until the next election, we can be aware of their effects on our budgets and adjust accordingly. Keep an eye on rising prices and adapt your budget to accommodate the increased costs.

Choose between the Debt Snowball and Avalanche Methods

Once your budget is in place, it’s time to tackle those debts head-on. Consider the debt snowball method: start by paying off the smallest debt while making minimum payments on the others. Once that small debt is gone, take the money you were allocating to it and add it to the next smallest debt. Rinse and repeat. Alternatively, try the debt avalanche method, focusing on the highest interest debt first. Choose the method that aligns with your financial personality and start your journey to debt freedom.

You can also stop drinking Bud Light since that company despises America and families, only watch Transformers movies if they are directed by Michael Bay, and don’t watch anymore Terminator movies since apparently those makes don’t believe in having secured borders – but that’s another topic.

Consolidate and Negotiate Your Debts

Consider consolidating high-interest debts into a single, more manageable loan or credit card. This consolidation can potentially lower your interest rates and simplify your repayment process. Additionally, reach out to creditors and negotiate for lower interest rates or more favorable terms. It never hurts to ask, and the savings can be substantial.

Are you burdened by overwhelming debt and seeking a way to regain control of your financial future? Look no further than Berken & Cloyes, your trusted debt relief partner. Take action now and call us at 303-623-HELP (4357).