How to Live Debt Free

FREE Resource #2:

Read this post first if you haven't: Introduction to Saving Money


If you want to know how to live debt free you are first going to need to know how to manage your money in an organized way that allows you to keep track and plan ahead of what money you earn and what money you spend this is called a Budget. I want to first praise God and Honor Him for helping me create this budget and sticking to it for my family. I am a homeschool Mom. I've been using this budget for about 2 years now and it's helped me alot stay on track. I'm considering creating Youtube videos that will be a step by step tutorial soon. I'll keep you posted!

How to Create a Budget:

Step 1: Make a list of your monthly bills in order of date due, with the balance owed. That’s 3 columns, with the title: (current month) Monthly Bills and update each month.

Date Due:	Bill Due:	Amount Due & Bal.:
1st	Credit card	$40-bal. =$200
4th	City bill	$80
6th	Electric	$150

Step 2: Take a separate sheet of paper or spreadsheet page and title: Month of  Budget at the top. Create 4 equal Columns. These will be titled by the week of your paycheck if you get payed bi-weekly make 2 columns if you get payed monthly one. First you enter your income, next of most priority is giving God His tithe and offering 10%+ we always take this out of the check and then with the total figure our budget. Prioritize: gas for car, food, diapers & formula, add home items such as t.p. and dish soap to your food budget anything you’re getting at the store like cat food, laundry soap, etc. this should be about the same every week. Next you have priority bills: what can wait, and what will have a late fee if a day late? Pay those first: loans, credit cards first, next is utilities these can be paid about 2 weeks later than the due date for city and electric, the cable internet at least ours is 3 days past due date, each bill should tell you when’s the max date before a late fee or cut off date, sometimes a $5 late fee is necessary to make your check stretch. Rent is next and ours can be payed 3-4 days past the due date we’ve payed all we could say $400 of $550 on the due date and next paycheck payed the balance without having to pay a late fee, but we never pay later unless absolutely necessary. You want to keep a good reference with your renter, creditors, etc. If you have to choose between paying a credit card or rent obviously pay your rent until you can catch up but don’t take out another loan to pay off the one just take the $25 late fee and pay the extra the next month or when you can. Here’s an example: this is for someone with a weekly payday on Friday.

Weekly Budget

4th	11th	18th	25th
Check: $500	Check: $456	Check: $475	Check: $456
Tithe/offering: $60	t/o: $50	t/o: $55	t/o: $50
Balance: $440	Bal. $406	Bal. $420	Bal. $406
Gas: $40	Gas: $40	Gas: $40	Gas: $40
Food: $100	Food: $80	Food: $80	Food: $80
Rent: $150	Diaper: $20	Rent: $150	Rent: $100=$550
City: $80	Rent: $150	Car loan: $150	Water: $45
Cell: $80	Credit card: $25	Credit card: $40	Car insurance: $50
-$10        Total: $450*	Total: $315 +91	Total: $460 -40	Total: $315 +91

Okay, for our rent I always divide by 4 and save that amount to get the payment of $550 a month. Make sure to add up total in each column to make sure you don’t go over the amount of your income balance.* In the example we are (-$10) or $10 over so you will need to adjust or make sure it can be covered from your balance which you can add but I suggest not adding so you don’t spend that money so you never spend over what’s in your account and you always have a positive balance. You could also just tithe but we always give at least a small offering of a few dollars or $5 and missions of $10-$20 a month. Tithing is important as a Christian and is necessary but that’s between you and God. I can testify He’s always provided when we tithe and I don’t question when He wants us to give someone some money I do it eagerly and obediently and when we’ve been in need people have blessed us sometimes before we had the need. Praise God! He’s showed me how to handle my money. Now it’s important to get those credit cards and loans paid off and don’t live off of them or you always will. Learn to live within your means and be content. This is what I’m learning as we pay off all our debt. If your income is less than your monthly needs then it’s time to pray for a raise or a second job or a better paying job, pray for what you need and watch God provide. Also, you may need to change your spending habits, switch to the cheaper brands, make your food at home, go on less trips to save on gas, learn to save money at the store, use coupons, shop at H-E-B they make it easy to save money, buy used at yard sales. You also need to save for emergency use such as car repairs- put aside any extra money and designate what you are saving it for and keep it in a savings account or in an envelope in safe keeping, (to date we haven’t been able to do this) but every time we've had an unplanned expense we've always had the money for it with my husbands pay check. Plan ahead so that you are in control of your money, also put aside money for entertainment purposes and try to keep $20- $30 in the bank each month. Switch to a free checking account; don’t pay money you don’t have too. Pray for wisdom, knowledge, and discernment in all your choices and God will lead the way for you to have a joy-filled life all the days of your life. Read the word every single day and pray for God’s plans.