Many times when I speak with individuals it is because they want or need to sell their home or they would like to buy a home. During my conversation with them sometimes I find out that some of them are in debt and cannot afford to keep or purchase a home.

During our conversation we discuss having a budget. While reviewing their income vs. spending, many times I am finding out that they know what they have coming in but do not have a true understanding on what is going out in expenditures.

Sure, all of them can tell me their rent/mortgage amount, the gas/electric bill, food bill, day care spending, and some of the normal regular things that come up. But many of them do not know how much a week they spend on a cup of coffee they buy at the local coffee shop or how much they spend a week when they go out to eat. The little discretionary spending habits are the ones that will add up quickly and tend to throw your budget overboard and keep you from getting out of debt.

A dollar here and the there that you are spending adds very quickly up to very many dollars. When you  don’t keep tabs on the spending, at the end of the month you might have more month left than money.

In order to know how much you can spend you need to make a budget. Yes here is that dreaded word: BUDGET.

You need to write down all of your income and then write down ALL of your regular monthly bills you need to pay. Things like the rent/mortgage, utilities, transportation, and any other bill you have that needs to be paid. Here is where many times the huge eye opener happens. There is a lot more month left and not enough money.

Knowing what you have coming in and where you truly spend your money will get you started on tackling your debt one bill at a time.