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. What can you do in the future to avoid drowning in debt all over again? Of course, it would help a lot if you hire bankruptcy attorney san diego when you’re filing another bankruptcy case, but knowing these tips is great as a guide to avoid it.
A Budget Can Help
Many people cringe at the idea of having to create a budget. Creating and sticking to a budget is not a common practice for everyone for assorted 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. So what is a budget anyway? 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. It becomes visually clear if you can summarize all your expenses into various categories such as utilities for the home.
Once you have recorded all your expenses in the budget, you will be able to see visually what specific expenses you are incurring. Knowing your total expenses on a monthly basis, you will be able to know if you will be able to save or if you are going to tap into your savings reserve. You should strive to control your expenses so that your monthly expenses are always lower than the money you take home from work. Through the use of the budget, if you find yourself in a situation where your expenses exceed your income, you will want to find ways to reduce the expenses so that you will positive net income monthly. By doing so, you can help yourself to avoid accumulating debt and in the long run avoid any chance of filing bankruptcy again.
There are ways to save money
Saving money through cutting expenses is the best way to bring yourself out of the mountain of debt. I will give you 2 categories of expenses that you can look to reduce, and they are food and entertainment.
Cut back on food expenses
Undoubtedly you have to buy groceries to feed yourself. You can save money without having to starve yourself. If you are looking to save money on soft drinks, instead of buying the national brand Pepsi for $2 a bottle, you can always buy the store brand for just a little over $1. If you can save $1 for every single item that you are buying, just imagine the amount you will saving. This is the quickest way to save some money, so to avoid finding yourself in debt and you will need to file for bankruptcy again.
Cut your expenses on entertainment
If you spend a lot of time in the movie theater, you should not pay full price for the movie tickets. You can ideally save a lot of money if you can be patient about watching that latest flick and wait till it comes out on DVD. Instead of watching that movie during prime time, you can also save at least $2-$3 per movie by watching the matinee show. If you want something to munch on during the movie, bring your own food, as the food from the concession stand is always more expensive. The first rule of thumb to avoid going into heavy debt or seeking for bankruptcy shelter is to save as much as you can, and cut back on all the unnecessary expenses.
To avoid bankruptcy, spend only what you have with cash
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 are making $y per month, and you are using only cash for purchases and expenses, you will never spend more than the $y you have per month. This means that you will not have any debt going forward. Many people ended up filing for bankruptcy because they managed to rack up enormous amount of debt on their credit cards. If you are frugal and only spend what you can have and can afford, you will then find yourself in a much better financial position.
Mentioned above are just some ways that I believe you can do to help you save some money. You have probably some people said before, “a penny saved is a penny earned”. Do not put yourself in a position where you will need to file for bankruptcy protection again. Learn from your previous experience and start your life anew and do not accumulate too much debt in the future so that you can avoid filing bankruptcy again in the future.