Single mom combined 3 clever budgeting steps to eliminate $77K debt. Here are her tips

Kumiko Love's method has been shared by hundreds of thousands.

Debt can affect anyone at any age. Whether you are fresh out of college or close to retirement, you may have debt in some shape or form.

"Good Morning America" is highlighting inspiring individuals who became debt free at various stages of their lives with "GMA’s Ultimate Debt Diet: Debt Free At Any Age.”

A mom who successfully eliminated thousands of dollars of her own debt is sharing her strategy for getting your finances in order.

Kumiko Love wasn't always good with money. But as the 33-year-old mother embarked on a career as a financial counselor, she learned valuable information that she has shared with 1.5 million followers on her blog, "The Budget Mom.".

"I really want to teach my readers [they can] have this life they truly love, but living in a way where it's not putting them in debt," Love told "Good Morning America." "It's about showing what that looks like in a real person's life, which is why I share my real numbers with my readers."

Love posted her budgeting method on her site, where it's been shared 141,000 times.

Here are Love's tips, reprinted in part, with her permission.

<strong>The Budgeting Method That Changed My Life</strong>

"My budgeting process incorporates three different methods -- the Calendar Method, the Paycheck Method and the Cash Envelope System," Love writes on thebudgetmom.com.

"Trust me, no one in the world had printables or worksheets that incorporated all three of these methods into one system or template. So, I decided to design my own."

"I am a firm believer that my budgeting method can work for anyone, no matter their income size or schedule. As long as you put in the work to make it personal and realistic to your own life, there is no doubt in my mind that you can be successful."

1. The Calendar Method

You first must identify the regular bills you're responsible for. These bills are usually around the same amount every month. For example, rent, student loan payment, gym membership, etc.

Using a calendar, Love designates dates for expenses and the amount due for each. She also writes down the calendar dates when she gets paid.

Love is a paycheck budgeter, which means she creates a budget everytime she's paid.

"It's a matter of writing down all my regular bills -- my monthly bills first," Love said in her Youtube tutorial. "Then what I do is I assign which bills I want to pay with what paycheck."

Love also uses the calender to identify pop-up expenses for birthdays and holidays.

She color code matches each bill to a specific paycheck from which the money will come to pay it.

Love says the calender method is a trial and error method to figure out the best way to pay your bills.

2. Paycheck Method

Before you budget, you must know where your money is going.

"[R]evealing the ugly truth about your spending can be scary, and you might not even want to know the truth. But if you don’t face it head on, you will never make any progress with your finances," she writes on thebudgetmom.com.

"First comes awareness, and then comes progress."

Keep track of every dollar by reviewing past bank statements and start categorizing your spending. Once you're aware of your expenses, you can start budging with Love's paycheck bill tracker (see explanation on template here).

The bill tracker was designed to create a zero-based budget. A zero-based budget simply means your income minus expenses, equals zero.

"Zero based budget is to create a plan for every dollar," Love told "GMA." "So every dollar [you] make is being used for a place in your budget. If it already has a place, then we get rid of mindless spending."

Love has two bill trackers for each month -- one for the paycheck she receives on the 5th of the month, and another for the paycheck she receives on the 20th.

The printouts show her monthly bills, the budget for each and what she actually pays. There are also columns indicting amounts in her cash envelopes, savings plans for holiday spending and extra debt she needs to pay off.

Love shares a detailed walk-through on Youtube explaining how she uses the bill tracker sheet.

3. Cash Envelope System

Once your necessary bills are accounted for on your calendar, it's time to figure out and budget all your other monthly expenses.

These are what Love calls "variable bills" and they're separate from priority bills like rent and electric.

Variable bills are not set in stone.

"For example, one month you might spend $30 on clothes, the next month you might spend $400," Love writes on her blog. "You have complete control over how much you spend on these items."

Examples of variable expenses include:

  • Clothes
  • Food
  • Entertainment
  • Household Items
  • Gas
  • Once you've determined which categories in your budget are variable expenses, then set a limit for each. Look at your past spending trends and decide how much money you'd like allotted to each category.

    "Remember, you will probably tweak these limits as you go, and you should be updating or looking at these limits every time you update your budget," Love explains.

    Let's say you spent $700 on food last month -- for groceries and eating out. From there, start tackling what you want to spend and slowly make realistic decreases.

    Decrease that $700 by $50, making it $650 a month for food.

    "If you can reach that goal, if you can stick to that, then decrease it another 50," Love tells "GMA." "Don't decrease it too much where you keep failing, get frustrated and stop."

    By using cash, this limits your debit and credit card use, so you're not putting yourself in more debt when paying for variable expenses, she noted.

    Love said it's also important to track your ever-increasing net worth to make sure you're making progress throughout your budgeting journey.

    In other words, you shouldn't be increasing your lifestyle costs whenever your income increases.

    This way, "you'll truly have the extra income to throw at financial goals," Love said.

    Through her budgeting methods, Love met her goal of ditching $77,000 in debt which included $32,000 in student loans, a $16,000 car loan and some credit card debt.

    Your own goals can be written in the "extra savings" column of the paycheck bill tracker. Love has heard from readers saving for big parties, car maintenance funds, a pet adoption or for annual property taxes.

    Once you track your spending, plan your calendar and budget your paycheck, you can hone in on bigger financial goals.