According to Ramsey Solutions, the average American adult owes $58,604 in debt, with 77% of all households carrying some debt. While this figure does include “good debt,” such as a mortgage, that’s still a considerable number. So if you’re in debt, you certainly are not alone.

When attempting to get out of debt, tracking your budget is essential. It can mean the difference between financial independence or staying stuck financially. Here is some budgeting advice for beginners who are dealing with debt.

Budgeting Advice for Paying Off Debt Faster

These budgeting tips can help you get out of debt and help you stay out of debt, too.

Choose a Budgeting System You’ll Stick With

Tracking spending is not fun, but it is necessary. You need to know how much money you have coming in and going out to know how much you have available for debt repayment.

Choose a budgeting system you’ll actually use. If you spend a lot of time on your phone or laptop, a spreadsheet or app might work best. If technology is not your friend, go old school with pen and paper. How you track your budget is not nearly important as actually doing it.

Have a Plan for Every Penny

Every penny counts when paying off debt. Make a plan to put every extra dollar you find in your budget toward your debt.

As long as all of your bills are paid and some money is going into savings, all other extra money should go toward paying down debt. Additional cash sources may include tax refunds, work bonuses, budget overages, or extra cash you make from a side gig. With most loans, the more you can put toward the debt principal, the faster you can pay it down and the less you’ll pay in interest.

Always Be Looking for Ways to Save

You don’t have to give up all spending to get out of debt. Just look for ways to save wherever you can.

The grocery store is an easy place to save between shopping sales and using coupons. See if you can get a better auto insurance rate. Consider dropping your least-used streaming service. Try online resale shops if you need new work clothes.

By spending less on some things, you can still enjoy others while you work your way out of debt. 

Learn the Best Ways to Tackle Different Types of Debt

You’re likely trying to pay off more than one type of debt. Most are manageable as long as you aren’t behind on payments. However, if you do get behind, especially on your mortgage or taxes, make sure you find out the options available to you for getting caught up.

Late credit card payments are one thing. Getting behind on your house payment or failing to pay taxes can have serious repercussions. 

Start Your Budget to Pay Off Debt

Hopefully, this budgeting advice can help you create a budget to pay off debt and improve your financial situation. Just remember to seek expert help if your debt burden becomes too big for your budget to handle.

For more tips on how to budget, browse the finance section of our site.