There can be many reasons for someone to go bankrupt. According to a study done at Harvard University, medical expenses are the most significant cause of bankruptcy in America. Apart from this, job loss, poor use of credit cards, divorce, and unexpected expenses are some other reasons why a person may suffer from bankruptcy.
In many ways, bankruptcy brings an opportunity to start fresh. However, it does not come without lasting consequences. Once the filing is done, a person needs to work hard to maintain a clean financial status to avoid further problems in the future.
The best course of action for you is to make a budget. Here are a few budget tips that will help you stay out of financial troubles and ensure you long-term financial health.
1) Plan A Budget You Can Stick To
Even if it doesn’t seem like it, budgeting helps you spend your money wisely. By putting your expenses into a spreadsheet and allocating money to different areas of your life, you are creating a roadmap as to how your money will be used. With this, you can decide how much money you want to spend on necessary expenses, luxury expenses, and savings and easily know when you are exceeding that budget. This is an efficient method of money tracking that helps you gain financial security and good money habits.
2) Track Your Expenses
Strictly analyze your expenses when developing your budget. Review each expense to ensure that it was necessary. If not, make reductions. Suppose your food budget is $150 per month. However, it includes regularly dining out at restaurants. You can lower the budget from $150 to $100 by eating meals at home. Another solution is to maintain a daily journal, which can be an easy way to track your spending.
3) Switch Card With Cash
If you find it hard to stick to your budget due to overspending, switch to cash. Take cash and separate it into different envelopes for your different expenses. By doing this, you can ensure that you are not spending more money than what you initially allotted from your budget. This lets you see how close you are to following your budget.
4) Start Saving More
Instances like unemployment or medical emergencies are unforeseen. However, the damage they cause tends to wreak havoc on your finances. Such situations are best avoided by maintaining some savings. You can allocate a section of your budget towards an emergency fund that will make you financially stable without compromising on your needs. Think about it, a little adjustment can let you pay for sudden emergencies at once, instead of carrying debt for months and filing for bankruptcy.
5) Adjust Your Expenses
Do you have the highest cable package at home? Does your cell phone plan have bells and whistles? Make slight adjustments to your monthly expenses to save a lot in the long run. Contact your bill providers to learn about less expensive plans that can lower your bill. You can also make similar adjustments to your shopping budget. For example, shop in bulk or when there is a sale.
6) Get An Expert’s Help
If you have any questions regarding bankruptcy and financial independence, visit our expert attorneys at Brian Walker Law Firm PC. They have over 20 years of experience in bankruptcy law and will provide you with the right guidance to overcome your financial issues.