Lets assume that you’ve finally decided getting out of debt is a priority and are looking to save money in the monthly budget by cutting expenses. Where do you start?
The Headache Factor Equation will help you determine which spending categories to cut first.
Not all categories are created equal. In some you can find money savings quickly. Others are going to take a little more time and effort. Some budget cuts will be easy to endure while others might lead to some family frustration at the lack of spending for that category.
In order to better identify the best places to save money in the monthly budget I’ve created the “Headache Factor Equation.” This formula takes into consideration three factors that are each scored on a scale of 1-5, with 1 being positive and 5 being negative. The lower the total cumulative score of the three factors the better when determining where to start saving money first.
The three parts of the equation are: