With either Chapter 13 bankruptcy or Chapter 7, you want to create a budget for your post-bankruptcy life. It’s crucial with Chapter 13 since you have a repayment plan based on what you can afford. Even with Chapter 7, though, which gives you a fresh start and liquidates assets, you still want to create a budget moving forward so that you can make the most of your fresh start.
To help you begin, here are some important tips:
- Eliminate or cut back on things that are not essential. You may be shocked by how much you can save if you bring lunch to work instead of going out to eat, for instance.
- Try to reduce costs with lifestyle changes. Maybe you’re paying for cable TV, for instance, but you could save $100 a month with streaming services.
- Pay for most things in cash. Something about using a credit card makes it easier to just swipe the card and decide you’ll figure out if you can afford it later. Cash doesn’t do that. That said, using a card in a controlled fashion can help you build up your credit.
- Track every single cent that you spend. Nothing is too small, not even that morning cup of coffee. Just as people accidentally overeat when snacking, they also accidentally overspend.
- Get someone else to hold you accountable. It’s all too easy to ignore your budget if you’re the only one who knows.
These tips can certainly help you get the most out of bankruptcy and move forward with your finances. As you get this process started, be sure you know what options you have and what steps you should take.