Turbo Tax

Tuesday, February 23, 2010

Tuesday's Tip - How to Get Out of Debt - Step 4

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Last week we talked about budgeting and how to do a realistic, before the month begins, budget.  This week we'll talk about priorities of where money needs to go.

The very first step is to make sure the basics are covered.
  •  Food, of course, is the first, because as long as your family eats, you are able to survive and fight your way out of debt.  You don't need to be eating fancy things.  You need to be couponing and making more food from scratch to keep costs down.  Going out to eat should be rare as long as you have debt.  Remember, you are sacrificing to win.

  • Utilites - You need your house heated and lights on.  

  • House payment or rent - This sounds so basic, however many people pay other debts before their house payment.  They do this because their house is usually a larger payment and they feel like at least they are doing something if they pay the smaller debts.  Also, if the smaller debts is a credit card, they tend to scream more if they aren't paid.  Don't be bullied, though, make sure your house is a priority.

  • Gas for your car - You obviously need to be able to get to work. 
  • Car payment - Hopefully, you don't have one, but if you do this is where it lies in the priorities.  If you owe a large amount of money on your car, consider selling it and getting something cheaper.  If you're upside down, you will need to get a loan for the difference of what you owe and what you can sell it for.  You'll be better off though, because the amount will be smaller and you'll be able to pay it off much faster. 
  • Basic clothing - No designer nothing, unless you got it from Goodwill!  I know most of us can go a long time without buying much clothing because we have a lot already.
Now your very basics are covered.  Don't forget those once a year payments that we talked about last week!  Since this is getting quite lengthy, we'll start the Total Money Makeover part next week! Taking care of necessities Works for Me!  Knowing I have the basics taken care of is truly a Finer Thing! This post is also linked to Tuesday's Tip Jar

If you're a blogger and have a great tip to share, link up below.  Please leave a link sending your readers back here to share the link love!  Make sure you link directly to the post and not to the front page of your blog.

http://1.bp.blogspot.com/_pAmsTm-z3tg/Sw3PPtd_hwI/AAAAAAAAABA/WdS_s3RO-Q0/s1600/E7DBF56A3D52E4B2E955790CFADC9760.png

7 comments:

Rebecca said...

Excellent tips! I especially like how you mention do make your house payment or rent. I have seen people blow those off in favor of a credit card and it is so important that house and home is first priority.

Happy Tuesday!

Becki@BlogMommas

Nikki said...

I'm totally confused about where I'm supposed to link. So here's my link anyway. lol

Perfect sunblock for double strollers

Lori @ Couponomic Stimulus Package said...

Nikki, So sorry about that. I'm trying to figure out why Mr. Linky stopped working?! OH NO!!!

Leslie said...

That's okay if your Mr. Linky. I'll check back later. But for now, here's mine:

http://lifewithleslieandtroy.blogspot.com/2010/02/works-for-me-wednesday-menu-planning-do.html

Thanks for sharing your thoughts. those are wonderful ideas and I hope it will help more people get out of debt.

Shelley Frady said...

Thanks for sharing your information. As a single mom I am working on getting debt free. It is not easy!

Savor The Savings said...

Thanks for the information. I am a single mom and trying to get debt free. The credit cards are all cut up.

Jessica said...

Thanks for the comment on Moneyless Momma's - I linked it, and my SIL will post the "link-back" sometime today - she started the site and threw up a bunch of hints and tips for me! :)

BTW: LOVE your site - I think that it'll become a daily read for me! :)

 
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