Although its important to save most people find it preferable to pay off debt such as credit cards as quickly as possible and then budget funds to invest. There is good and bad debt and most of us find that some level of debt is necessary. Debt can be good as long as its used wisely and a personal budget is a simple tool to help you keep you on track.

Debt elimination is the key to financial freedom because as long as you owe money you can’t consider yourself financially free. If you don’t eliminate debt your future earnings do not belong to you but to your creditors. While there are a number of steps involved in becoming financially free the need to get out of debt first is paramount.

In the first few months, it’s essential to review account statements regularly and see exactly how much was spent on various expenses. These figures should be compared to the amount set up in your budget and any adjustments should be made to reflect the reality of your life. This is the best and easiest way for your budget to remain relevant in your financial life.