The fastest way to get debt free fast is to start an envelope budget. Also known as a money jar budget, this can change the way you deal with your finances.
The biggest problem with those who don't budget is overspending. Overspending happens in your variable part of your budget where you have all the breathing room. While you might not be able to do anything about loan payments, mortgage payments and other fixed expenses like your utility bills, you can control your spending.
A money jar budget can help you learn to spend with cash instead of living on credit and can help you get rid of debt as well. Not only does it teach you to live within your means but it can help you pay down your debt quickly.
You can use envelopes or jars for your budget and you need to stick to it. Consider grocery shopping once a week only and only visiting the bank machine once a week to use your ATM card just to take out the cash you need for the week.
Fill your envelopes or jars with your cash based on the variable budget you set for yourself and with the rest of your pay, split it between your fixed bills, paying down debt and your savings account. A great way to save is to allocate a percentage of your budget and have your bank directly transfer that amount on each payday to your savings account.
Another tip is to make your funds less available. Consider lowering your daily withdrawal rates or not using a debit card so that you will be living on cash and not spending so much. Get rid of your higher interest debts and if you choose to consolidate, be sure you don't run the old debts up again.
Budgeting will make a huge difference in your ability to save and have financial freedom. While it may today seem like it will be restricting to start living within a budget, there is long term gain that actually equals financial freedom.
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