subject: Debt Management Budget [print this page] Debt management budget is a budget in which you plan your expenditures in such a way that you have enough resources in the month to pay for the interest and installments of debt in such a month. Debt management budget can be planned in very easy way. You just have to know the exact nature and distribution of your expenditures and income. When you are planning the process of debt management budgeting, you should be peaceful from heart, mind and soul. You should not start the process of debt management when you are tensed or the fear of bankruptcy and burden of tax has overwhelmed your mind. I will advise you to go to some place which you like a lot and which relaxes you. That place may be a coffee shop, a near by park or some shore or some other similar location.
For making a debt management budget, the first you need to see the nature of expenditure that you do in a month. The nature of expenditure can be distributed into three categories. These categories are necessity, comforts and luxuries. Now, make a column of each category. Now, start putting the expenditure in each category. After you have completed the first step of debt management budget, you have to do the revisions a number of times. If you forgot even a single important item, your debt management plan will fail.
Now, next step is to calculate the money that you have to pay to the creditors each month. After summing the amount, deduct it from your monthly income. Find the remaining net income of the month and adjust your monthly budget from the net income in the order of nature of expenditure. Place the money for the necessity first, then comfort and leave the remaining money for luxuries if you are left with any. This is a simple debt management budget.
