budgeting chartIf there is one single thing that will make the difference to your personal finances, it is budgeting.

And the reason I know this is quite simple. Back in the late 1990’s I started to get into debt because my company was failing.

I ran up credit card debt of over $80,000. It was quite simple. I started with one card, ran it to the max, then transferred the balance to another card at 0%, and on and on until I had around 10 cards, all maxed out.

Now that kind of thing is no longer possible as credit is so hard to get these days. But, it doesn’t matter much, since either way, you end up with no cash.

Start Planning and Budgeting

In my case, there was only one way out. Stop spending and start planning. At the time I used a piece of software I created myself called ‘Personal Accounts’. It had a very simple interface and allowed me to schedule payments.

But what it didn’t have was a budgeting facility. I had to use a spreadsheet for that. Now, spreadsheets are fine, but you have to program them yourself. And that means time. And time is money.

As a result it took me much longer than normal to figure out what I needed to do to start saving and planning my finances ahead.

One thing I knew was certain: unless I started budgeting specific amounts for practically everything, I would not succeed. I knew I had to think into the future. And to do that I had to look at the past!

Getting out of Debt

Analysing my expenditure was everything. I was spending over $500 a month on food (organic mostly). I was also spending money keeping two vehicles going.

I checked my income, took my expenditure away from it, and bingo. It was plain to see exactly why I had gotten into so much debt.

The next thing to do was to forecast and reduce my expenditure until it broke even with my income. And finally, push for a little more saving so I could start to repay the debt.

I am glad to say I managed to achieve a reversal of my situation within 3 months, and I did it using the successor to the Personal Accounts software: Home Accountz.

You can do this too. Take the free trial of Home Accountz 2012 by clicking on the link below and we will help you get out of debt using the very simplest but powerful budgeting tool  available.