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The first thing you must do in order to take control of your finances, and eventually get out of debt, is to set up a budget. Ironically this is where a lot of people stop because they find that it’s too difficult, too much hard work, or they think they can “work out their income and outgoings in their head”.

I admit that setting up a budget (which I’m going to do myself shortly) is a tedious task. No - it’s not very interesting. No - it’s not very entertaining. For some of us it can even be a bit of a “slap in the face”. But long term it’s well worth the time and effort.

Try not to think of a budget as a pair of restraining handcuffs. Think of it as a means to take control of your finances and achieve financial freedom. A budget lets you control your money - instead of your money controlling you!

A good buget will help you get out of debt faster, because it helps you to identify areas where you spend too much money. By using those spare funds to pay down your debts instead - not only will you get out of debt faster - but you will also save lots of money in interest payments.

There are several tools that you can use to make it easier setting up a budget. You could buy a piece of software to do the job for you - but more often than not these packages tend to have more features than what you really need. You could download a spreadsheet template to get you going - which is both cheap and easy - though you will need an office suite to run it. Finally you could find a template to create your own spreadsheet. This is more time consuming - but free.

Personally I will try out the first two options - and let you know of my findings when I have had a go at it. Don’t let this hold you back though! Start your own budget today - even if it’s a basic one - and take control of your money

Technorati Tags: Budget, Pay off debts, Control your finances

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