In its simplest form, budgeting is comparing income to expenses. There is no better time than now to start recording and evaluating your budget. To be successful at reducing and managing debt, it is extremely important that you create a budget because it allows you to take a “snap shot” of current expenditures, which enables you to analyze spending habits. Taking a “snap shot” allows you to view your finances by looking from the outside in. As consumers, we often tend to generalize when evaluating our spending from the inside out, which causes us to underestimate the cumulative costs of our routine spending behavior. Most consumers have a good knowledge of their income but lose track of their spending because they only account for purchases that were made in the recent past. Our mind’s record and perception of our spending habits tends to be inaccurate which prevents us from realizing the effect that spending is having on our “true” income (income minus obligations). We tend to avoid the reality of the long-term effects associated with irrational spending. Budgeting assists in realizing how much our style of living is really costing. It also assists in helping to organize personal finances and realize where to cut back on spending. Creating a budget makes us confront our problems and enables us to establish a starting point in the quest of becoming debt free.