Budgeting is a key factor in helping so many people get out of debt and stay out of debt. The core of budgeting is to see your monthly spending needs and habits. The purpose of a budget allows you to track your personal cash flow. Your personal cash flow is how much money comes in and how much goes out. Adding up your monthly income is easy, but totaling up all your expenses takes a little bit of work.
First, you’ll want to collect all your medical bills, other bills, your credit card statements, your checkbook register and all receipts including anything you buy with cash.
If you haven’t been keeping good records, you may have to get a receipt of every dollar you spend for a month before you put together an accurate budget. Track you expenses by making entries in a notebook or learn how to in Microsoft Excel. If insurance covers some of your bill, make sure to only include what you owe each month.
Now divide your spending into fixed costs and variable costs. Your fixed costs will include such things as mortgage payments, rent or loan payments. Your variable costs will include such things as clothing, food and entertainment. Now that you know how to budget, you need to learn how to stick to one.
Once you are managing your spending, you can easily decide which costs you can cut and which you cannot. In most cases as soon as you see how much you are spending on certain items, you will be motivated to cut back in order to cover your prescriptions or medical payment alone. Stay motivated by setting goals.
Medical debt can be overwhelming and burdensome however it’s important to stay on track and pay each payment on time in order to pay it off quickly and avoid late charges or other fees.