You're excited. You've just bought a new outfit for tonight. You're going to that new restaurant in town that you've heard is a bit pricey. It doesn't matter though because you are free. Gone are the days worrying about what pound is going where. You're feeling good and looking better. Being debt free has changed your life.
First things first, we need to make budgets sexy.
This is when we look at your income and what you spend each month. You can make a list like so;
- Rent - £400
- Electricity - £40
- Council tax - £120
- Credit card 1 - £200
- Credit card 2 - £100
- Loan 1 - £150
- Netflix - £6
- Amazon Prime - £8
- Food - £140
- Travel - £100
Total - £1264
Income - £1300
Disposable income - £36
This is your budget and you need to make sure that it is kept up to date every month. Look down the list and be honest with yourself. Do you really need Netflix and Amazon prime? Can you cut out things you don't need? Do you need to drive to work?
If it is a necessity then keep it.
If not, cut it. Save that money and put it towards paying off your debt.
Go down your list and look at all of the things you could realistically cut out. It can all add up.