Lesson Learned After Filing Bankruptcy
Just because you will be filing for bankruptcy, or if you have already filed for bankruptcy, does it give you the green light to spend like you used to before and accumulate massive amount of debt again? Hopefully your answer is no, and that you have learned your lesson from this painful and humiliating experience of having to file for bankruptcy protection. Since you have been through the financial hell, what should you do in the future to guarantee that you do not fall back into this kind of financial abyss again?
Create A Budget And Stick To It
This is easier said than done. Most people procrastinate doing a budget for many reasons. Some people just did not know what should be tracked and how and to track it, while other people are just plain ignorant that creating a budget is one of the smartest thing you can do in your life. Initially when you are creating a budget, track every single expense that you have down to the penny. Once you see a few months of expenses recorded, you can categorize these expenses into major categories in your budget. For example the line item for utilities expense can include water bill, garbage collection bill.
The idea behind a budget is to know every single expense you will be incurring. Once you know that, you will also know how much money you will be taking home each month, you will be able to tell if you have any surplus or if you are in the deficit. Ideally you will want your expenses to be much less than the money you are making monthly. If you see that you are spending more than you have (through the use of the credit card charges), you will need to find creative ways to reduce the expenses. By doing so, you can help yourself to avoid accumulating debt and in the long run avoid any chance of filing bankruptcy again.
Find Ways To Save Money
There are many creative ways to save money, depending on what expenses you are looking to reduce. For the purpose of this discussion, we will just concentrate on 2 things, food and entertainment.
Save money on food
Undoubtedly you have to buy groceries to feed yourself. Instead of buying the national brand name products, e.g. Kellogg’s Corn Flakes, buy the store or generic brand. Kellogg’s Corn Flakes can cost you over $5 for a box, but you can easily find a similar substitute by buying the store brand for less than $4, thus saving you $1+ in the process. Do not look at this $1+ as chump change as every little savings add up in the end. If you are looking to avoid being in debt, this is a good way to start because you do not want to find yourself facing bankruptcy again.
Save money on entertainment
If you are a patron of the movie theaters for that latest action movie or comedy, avoid paying the full price of admission. Ideally if you can wait for the movie to come out on DVD, that is the best way to save. But if you must see that latest blockbuster, then go to the matinee showing which is generally $2-$3 cheaper. Also avoid buying food from the concession stand, as the markup on the food is astronomical. If you need something to munch on, bring your own food. If you are looking for ways to cut back on your expenses and to avoid any chance of accumulating significant amount of debt and to stave off filing bankruptcy, then do everything you can to reduce or eliminate your expenses.
Use Cash If Possible
If you can change your spending habit to use only cash to buy anything that you need, that is a big step forward to becoming debt free. If you can only spend $x per month because you are only making $x month, you will never accumulate debt that you cannot handle. One of the biggest reason many people had to file for bankruptcy is because they are so used to charging their purchases on credit cards. If you can only spend what you have, then you will not find yourself with a big credit card bill at the end of the month and not being able to pay for it.
Be Smart About Your Money Post Bankruptcy
These are just some of the ways you should look into to save some money. Remember the old saying “a penny saved is a penny earned”. You should know by now how easy it is to amass a lot of debt in a short time, and eventually find yourself in so much debt that your only option is to file for bankruptcy protection. Learn from your previous experience and start your life anew and do not accumulate too much debt in the future.