How to Get Out of Debt: Step 3 – Create a Budget & Stick to It

Corey —  March 2, 2010

       This article is the third in a series on how to get out of debt. If you haven’t already, you should check out the previous articles:

Step 3 – Create a Budget & Stick to It

       I’ve said it a million times (OK, at least five times on here for sure) – you need to have and use a budget to achieve personal finance success! This is true whether we’re talking about paying off debt, saving for the future, planning for retirement, or becoming a generous giver. The budget is an essential tool for personal finance.

       But it’s especially true if you want to pay off your debt as quickly as possible! Knowing how much you spend will help you see where you can cut back and save the most money. Aiming for a specific amount in your budget will enable you make sure you have enough money left over every month to put extra payments toward your debt. If you don’t take the time to create a budget and stick to it, you’re putting a major hurdle in your path toward paying off your debt.

It Doesn’t Need to Be Complicated

       Now I want you to understand that budgeting is not complicated. It simply means writing down your income and expenses. It doesn’t matter how you do it – as long as it works for you. In fact, there are many ways to create a budget and track your spending. My favorite way right now is to use Mint. It’s easy, intuitive, and nearly automatic. You can have alerts sent to your email or phone when you approach certain thresholds in your budget (even for individual categories).

How to Get Started

       If you want to get started creating a budget but aren’t sure how (and you’re not going to use Mint or other software), then you’ll need to start tracking your expenses for three months. It’s not fun or exciting, but it will help you see exactly where your money is going every month. From there, you can build your budget and begin to set goals for how much you spend in each category every month.

Remember – It’s Only Temporary

       Finally, for those of you who hate the idea of a budget, I want you to remember that this isn’t forever. There will come a time when you won’t need to track every penny you spend. You will eventually gain control of your spending, have an emergency fund, and be paying all your bills on time. But to live without a budget, you must first live within one. Even after you’ve gained control of your situation, I think you’ll find that you’ll continue to keep updating your budget because it’s such a useful tool. If the idea of creating a budget and sticking to it drains all the joy out of your life, remember that it is only a temporary situation.

Get Free Updates!

       If you want to keep getting tips on how you can get out of debt and manage your personal finances well, make sure you sign up for free updates to Provident Planning! I’ll be continuing this series throughout the year while I also explore other aspects of personal finance.

       Let me know how you’re going to create a budget & stick to it in the comments below!



Corey is currently pursuing a Master of Arts degree in religion. While he enjoys learning and writing about Christianity, another one of his new passions is writing about personal finances in order to help others make wise decisions with their money.

5 responses to How to Get Out of Debt: Step 3 – Create a Budget & Stick to It

  1. Great ideas. I started tracking our spending just in February then lost my job but I kept receipts and totaled. Ouch! I found areas of enormous drains on our finances. Keep up the good work.

  2. Thanks for your comment, Donna!

    Once you start tracking your expenses you’ll often be surprised at where the money is leaking out. Many times it’s just small things here and there that really add up. Congratulations on taking an important first step to gaining control of your money! And thank you for your encouragement!!!

  3. I think most of us don’t use a budget because we think of it as an overseer of sorts, and we don’t want to be subject to it, or to have it identify that we’re out of control. It’s kind of like the Apostle Paul writing (loosely) that the law came along and made him aware of his sin.

    Interesting point about budgets being temporary, I never thought of it that way, but it makes sense that once you reach a point of relative financial independence, you won’t need a budget to control your spending. Maybe that’s why rich people seem so…rich! They aren’t as constrained.
    .-= Kevin@OutOfYourRut´s last blog ..Wasting (Money) Away Again in Margaritaville =-.

  4. You’re right, Kevin. A budget makes you responsible for how you spend your money because you’ve made an agreement (with yourself or your spouse) that you’ll only spend so much in each category. Responsibility isn’t necessarily “fun”, but it is necessary for success.

    I really think it helps people to keep in mind that a strict budget is not permanent. Yes, you’ll need it until you get to the point where things are under control. But by that time, you’ll have such a good handle on your finances that you probably won’t need a budget to be your overseer anymore. They’re still useful at that point but not necessary. Thanks for sharing your thoughts!

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