Life after bankruptcy does not have to be bleak. Once the court discharges many of your debts, it is easier to start all over with a clean financial slate. A key part of leading a healthy financial life involves effective budgeting. Here are some tips for creating and sticking to a budget after bankruptcy.
Track Your Spending
Begin by keeping track of your spending and creating budget line items of your essential and non-essential purchases. If you are spending more than you earn each month, cut down on elective expenses and consider moving homes to lower fixed costs such as rent and gas. After setting the budget, continue to monitor your monthly spending though websites such as Mint.com in order to track any mistakes and modify your behavior.
Use Automatic Deductions
If rampant credit card spending led to a previous bankruptcy filing, automatic bill payments and deductions may be a key part of your budgeting strategy. Research the automatic withdrawal options available from your bank, credit card companies, and retirement account managers. If you automate deductions and pay off your bills in full, you will not incur late fees and can avoid paying interest.
Eat at Home
This may sound like a simple tip, but cooking food and eating it around the dining room table can save a great deal of money on dining out expenses. In turn, this can lead to also spending less on parking garages, tips, and gas. A good tip for sticking to a newly created food budget is to invest in Tupperware and a lunch tote—and bring your lunch to work every day.
Reevaluate the Budget Every Few Months
Do not be afraid to adjust your budget every few months. You may need to begin aggressively saving for an upcoming vacation or want to plan for a large purchase. By decreasing some budget categories and trying your best to spend less than the allotted amount, you will be on your way to financial stability.
Do not file for bankruptcy without first consulting a local bankruptcy attorney. The experienced legal team at Cutler & Associates has been helping Illinois households in Schaumburg, Aurora, and Chicago for more than 25 years.