The Benefit of Having a Clear Budget When Trying to Deal with Debt

TRI Writer • August 30, 2021

If you are overwhelmed by debt or can’t seem to stay on top of your bills, and you aren’t sure where to start, you can trust a budget to lead you in the right direction. Having a clear budget when trying to deal with debt is essential.

A Budget Can Help You Change the Way You Handle Money:

If you are overwhelmed by debt, chances are you need to change the way you handle your money. A budget is the tool most will need to use to do just that. When budgeting, you can understand where money is coming from and you can see where you spend it. Having a budget in place allows you to make your available money do what you want it to do – rather than moving forward without a plan and very little control over the end result.

A Budget Can Help You Set & Track Financial Goals

One of the benefits of a clear budget is that it allows you to set a goal. For most, the overall goal is to make more money than they spend. Other common goals a budget can help with include:

  • Identifying negative spending patterns
  • Reducing spending
  • Paying off debt
  • Avoiding new debt
  • Prioritizing spending
  • Saving for the future

A Budget Can Help You Feel In Control of Your Finances Again

For many, instituting a budget can help them feel in control of their finances again – and when you’re drowning in debt or struggling to cover your monthly expenses, feeling in control of your finances again is a significant benefit.

A Budget Can Help You Get Out of Debt:

When you’re in debt, you pay more for your original purchases. Interest payments cut into your income. Your money is no longer working for you – it’s going towards interest and fees. The financial burden this creates can limit your family’s choices. Using a budget to help pay off debt allows you to take your money and redirect it toward those items and goals that are a priority in your life.

Budgeting & Bankruptcy: Getting Out of Debt

In some cases, creating a clear budget can make it perfectly obvious that you don’t have sufficient income to cover your bills or your basic needs. If this is the case, reevaluate your numbers to ensure that you can’t eliminate any expenditures. If it’s not possible, you may need to consider alternate solutions. One solution for families who are buried in debt without the means to pay it off is bankruptcy.

If you need help filing bankruptcy , or if you have questions about how filing bankruptcy can help you and your family get a fresh financial start, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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