Where to go from here

Now that you have your budget sheet is done, what do you do with it? A budget sheet, in my opinion, is like tracking your diet, once you know what you’ve been eating, you gotta figure out what to cut out. The first thing you gotta do is cut out debt. To do so, I recommend the snow ball affect. Most people believe that you should focus on the debt with the highest interest rate, but no. I say focus on the one with the smallest balance.

Lets say you have 2 credit cards and student loans. Your 2 credit card balances are 1500 and 2200, your student loans are 14000. The minimum payments are 150, 220, and 400 respectively (numbers are all made up for the sake of this example). Thats all you need to focus on. The easiest way to stick to a diet is to keep it simple. Just like your budgeting. Getting rid of debt isn’t hard but being consistent with your plan is. Now back to the example. After you have paid for all of your expenses, and all of your minimum payments, whatever is remaining goes directly to the lowest balance you have, month after month until theres no longer a balance. Once that happens, you take the 150 that you no longer need and use to pay the next smallest balance, hence the snow ball affect.

Next post, what to do once all debt is paid off!!!

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