Tips on Budgeting – How 1 change a month could get you out of debt

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More often than not it is the little changes over time that make the biggest difference. Think about it. If you wanted to loose weight I doesn’t just happen over night. You need to make small changes in your daily lifestyle, and then over time those changes will result in overall weight loss. How to manage money is the same. It is the small changes in money habits compounded over time that will make the biggest difference. If I could give you one of the most basic tips on budgeting and said one change a month for a year could get you out of debt, would you believe me? Lets look at it closer:
Ask yourself, could you save $10 a month each month for a year? It wouldn’t be that hard. All you would need to do is take one expense each month and focus on how you could reduce it by $10. An example of tips on budgeting: if you gave your cable company a call and removed some of the channels you never use. If you are able to do this for 12 straight months here’s what the reward would be:

Lets say someone has $5, 000 in credit card debt at 18%. Here’s the breakdown:

Minimum payment $150/month (3% minimum)
Interest paid $4, 799
Duration $18.8 years

Apply the $10 per month savings onto the credit card:

Balance after year one $3, 197.37
Payments on month 13 $120 (savings) + $150 (Original payment)
= $270

If you apply the $270/month directly onto the credit card it will take a total of 2.2 years to pay of the debt and you would save $3, 897.33 in interest. If you now take that $270 a month and invest it for 16.6 years you would have $117, 632 in the same time it would take to originally pay off the credit card. If you learn how to manage money, it can make all the difference in your finances.
You can see with this example that 12 little changes spread over a year can make a huge difference in your finances. Follow these tips on budgeting and learn how to manage your money and challenge yourself to make the little changes that will make the big difference. Small steps towards a common goal can create a big change.

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You can pay off your debts and save money at the same time! Say goodbye to your boss forever! A blog that will show you the secrets of the wealthy: www.howtomanagemoneytips.com Get a free budget sheet, net worth calculator, tools and more: www.howtomanagemoneytips.com/social.html

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