For a Debt-Free New Year Set a Budget and Stick to ItThe crucial first step to having money is to pay off the money you owe.

If you're one of the40 million Americans who have student loan debtyou know how difficult it is for you to pay down your debt while also making mortgage/rent payments, purchasing a new vehicle or chipping away at other debt like credit cards.

Several years ago I was in the same situation. I owed more than $100k in student debt with a car payment and bills adding up. Over the course of three years I paid off all my debt with a little money left in my bank account. I paid off all my debts by sticking to a budget.

Budgeting 101

You need at least a general understanding ofbudgeting basicsbefore setting a budget. That begins with selecting the best method for you to create, track and monitor your budget with one of the four methods:

笔记本和pen.With this old-school method, you simply write down all of your sources of income and expenses.

Spreadsheet.Using software like Microsoft Excel or Google Sheets, you can organize all of your financial information, which will be automatically added for you.

Online software.There are several free online software options, such asBudgetSimpleorMint, that can be used to track your spending

Financial software.If you have the experience or skill set, financial programs like Quicken also work in creating and maintaining a budget.

最好的方法,你的预算,结算后you can start creating a budget that best suits you. Remember, that's going to vary from person-to-person based on other considerations like marital status and where you're at in your career. However, there are still some common components that help establish a budget.

Related:7 Ways to Be Debt-Free for the Rest of Your Life

Determine financial goals.

What financial goals do you want to meet? Immediate goals, such as mortgage payments or food, are necessary. Secondary goals like a trip to Spain aren't essential and shouldn't be considered until after your goals have been met. In this scenario, we want to get rid of that student loan debt.

Calculate income and expenses.

Reaching your financial goals begins by listing all of your monthly income and subtracting your fixed committed expenses, variable committed expenses and discretionary expenses. After calculating your income and expenses, you want to make sure that you don't have more money going out than coming in. If you do (don't be ashamed, you're not alone), you need to start changing your spending habits and cut unnecessary expenses.

Revisit your budget.

After a month, go back and revisit the budget that you originally created. You'll probably have to make adjustments and take into account expenses that you forgot. Remember, you want to throw as much money as your can at eliminating your debt each month. A good goal is 30 percent of your budget. You need to think of your student loans or credit cards as a mortgage payment and pay more than the minimum amount each month so that you're not paying all of those interest fees.

Related:Don't Let Debt Crush Your Financial Dreams

Getting out of debt.

Creating a budget is an excellent start to paying off your debts, but to get myself out of debt I had to find some unexpected, additional income.

Live the "poor lifestyle."Just because you have a job and are done for life with eating ramen noodles doesn't mean that you should give up on the college lifestyle. Be frugal and penny pinch. Live in affordable apartments or towns, get a roommate, use coupons, don't go out as much and get rid of unnecessary spending. Drink water, it'll save you a lot.

Earn money on the side.There are hundreds of ways to make some extra cash on the side by doing something that you enjoy or have knowledge with. You could become afreelancerin any number of fields or or start a side business, like a weekendmoving companyorphotographer on the side.

Negotiate.Whether it's asking for a raise, increasing your freelance fees or talking to your lenders, you can earn and save more money each month by negotiating for more favorable terms.

Automatic payments.Set-up automatic payments for every bill so that the payment is taken out of your bank account each month, as opposed to taking it out yourself and second guessing the amount. I've been guilty of not paying as much as I should in the beginning. These also eliminates the possibility of late fees and you may even get percent reduction in your loan. I always make sure I put the "minimum" amount automatically. You can always pay more.

Don't add to your debt.A new car, purchasing a home and even getting married are all goals that we strive for. However, they are costly. Put off these major life-changing events until you've gotten yourself out of debt. If this can't wait, at least consider looking at cheaper alternatives. I personally managed to get married and have a good wedding with all our family and friends there for under $5k. It can be done.

You'll need discipline.

Budgeting takes a lot of discipline. That's the most challenging part. You have all of this extra cash and you've been hustling to make it happen. Don't you deserve to splurge a little by going on an exotic vacation or buying several new pairs of shoes?

Not if you want to get yourself out that debt that's been holding your back. Once you slip, it's pretty easy to continue on that downward slop.

You have to stay motivated and keep focused on the long-term plan. If you do, you'll knock out your debt in just a matter of years. Have a deadline in mind, after which you can enjoy the fruits of your labor. Don't hesitate to turn to your loved ones for support when you get off-track. They should help keep your going.

Creating a budget isn't something that's going to be create overnight. You'll need a couple of months to track your spending and get your budget in order. It might be challenging, but keep your eyes set on achieving that ultimate goal of getting completely out of debt.

Your debts won't go away overnight but thereisa way that you can get out of debt. Follow these simple budgeting tips and you'll ultimately work your way out!

Related:How to Make Debt Work For You