Creating a Budget and Managing Debt

Jun 29, 2023


Making a budget is key for managing your money. It gives you a clear understanding of the amount of money coming in and where your money goes each month. Budgeting is one of the best ways to reduce your expenses, avoid overspending and help you pay down your debt. You can use budgeting software, an excel spreadsheet or even just a pen and paper. Let’s discuss the basic process for making a budget and review different debt relief options available in the State of Wisconsin.

Calculate Income

Make a list of all your household income sources and the amounts you receive per month. The list may include employment, child support, social security, or any additional sources of income. Review your pay stubs and make sure to use your net pay, which is the amount you take home after paying taxes, insurance or contributing to retirement. Most likely you are paid weekly, bi-weekly or semi-monthly by your employer. To turn the amount into a monthly figure, you will need to take your net pay and multiply it by either 52 for weekly, 26 for bi-weekly or 24 for semi-monthly. Then divide that amount by 12 to get a monthly figure. If your pay varies you will want to use an average pay stub.

Calculate Expenses

Make a list of all your household expenses and the cost per month. The list should include fixed expenses like mortgage, rent, car payment, or any monthly expense that stays the same each month. It should also include variable expenses like groceries, gas, eating out or any other expenses that change each month. Review your recent bank and credit card statements to get actual amounts and then you can use an average. It will also be helpful to categorize the expenses as “needs” or “wants” so you can make adjustments later. You should make a separate list of your debts such as credit card or medical bills, the minimum payment requirements, and the total amount due. If you are unsure of what debts you have, you can pull a free credit report once a year from Annual Credit

Review & Adjust

When you subtract your total monthly expenses from your total monthly income you will see the amount you have leftover every month to pay towards your debts. After adding up the minimum payments for your debts, you may have to make adjustments to your budget. Review your expenses in detail. You might be surprised to see where your money is going. By reducing the amount of money going towards things you want verses need, it may be enough to help you pay off your debts. If you can pay more towards your high interest debts, you will pay off your debts sooner and save money. If you are unable to pay more, or if you don’t have enough money to go around to all your creditors; don’t be discouraged. There are debt relief options that can help you.

Debt Relief Options

There is no shame in asking for help. If fact, the sooner you do, they more options there may be available to you. Being aware of your financial situation and reviewing all your debt relief options will ensure you find the best option for your situation and circumstances. Check out our blog, “Debt Relief Options in Wisconsin”. We review the following debt relief options: consolidation loan, home equity loan, 401(k) loan, debt management plan, Wisconsin Section 128, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Not all debt relief options are right for everyone. You should review your financial situation and debt relief options with an experienced debt relief attorney to make an informed decision. They can provide you with the knowledge you need and help you create a plan that is right for you.


Dealing with debt can be overwhelming and getting out of debt can seem hopeless at times. At Pedersen Law Office, LLC we understand how stressful being in debt can be; that is why we offer free consultations. We will discuss your circumstances and goals and help figure out what debt relief option is best for you and help you through the entire process. Our law office serves the communities of Appleton, Menasha, Neenah, Oshkosh, Green Bay and their surrounding areas.

Category: Bankruptcy

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