by: Michael Saunders

Establish a Budget and Stick to It: Most people can't tell you where their pay checks go each month. All they know is that they don't have enough money to make ends meet. That's like having a checking account, writing checks, and never balancing it. Don't leave the management of your money to chance like that. Establish a budget and stick to it. However, before you can establish a budget, you must first know how much money you are currently spending each month.

Understand that there are monthly expenditures that you may not be able to change immediately, for example: mortgage/rent and car note, and there are monthly expenditures that you can change relatively easily: food, clothing and utilities. Focus on the ones you can do something about right now, and implement a budget reduction plan.

With regard to the monthly expenditures you can change immediately, review the amount of money you are currently spending, and try to reduce that amount by 25% the first month. For example, if you are currently spending $300 a month on food, try to spend no more than $225 (or 25% less). Then, after a few months, try to further reduce the amount you are spending to no more than $150 a month (or by another 25%). Keep reducing your budgeted amount until you feel you have decreased this monthly expenditure by as much as you possibly can.   (continued...)
The Most Effective Ways To Get Out Of Debt and Save Money (Part 1)
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