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Creditors use budgeting guidelines when reviewing and approving credit. If your debt exceeds the financial communities recommended guidelines, then you have a higher risk of credit applications being denied. Plus, you will pay more interest since you will be perceived as a higher risk.

Getting, and keeping, your debt in line with recommended guidelines, is an important step in debt relief and debt recovery. Use the following guidelines to review the items in your budget, and make special note of expenses that are out of line:

• Housing 35% - Mortgage or rent, taxes, repairs, improvements, insurance, and utilities
• Transportation 20% - Monthly payments, gas, oil, repairs, insurance, parking & public transportation
• Debt Budget 15% - Credit cards, personal loans, student loans & other debt payments
• All other expenses 20% - Food, insurance, prescriptions, doctor & dentist bills, clothing & personal
• Investments & Savings Budget 10% - Stocks, bonds, cash reserves, art, etc.

Next to each item that is out of line, make notes as to why you think they are out of line with recommended guidelines. Be honest, be brutal, but write it down. It is the only way to ensure that you consciously accept the reasons for your debt problem so that you can fix it permanently. Remember, debt relief is a temporary solution, only you can make debt problems disappear for good.

If you find one guideline percentage to be more than you need, or less than you need for your personal situation, feel free to take from one to give to another. Keep in mind though, you want to eventually get your debt budget down to, or below, that 15% recommended guideline. That has to be your primary goal if you are using Budgeting Guidelines for debt relief.