Bankruptcy leaves a stain on your credit that is hard to wipe out. While time and effort will eventually repair your damaged credit, following these tips to avoid bankruptcy in the first place will leave you with a healthier financial picture. To live within your means, which is the easiest way to avoid bankruptcy, follow these personal budget tips recommended by our Concord bankruptcy lawyers.
Create a Realistic Budget
A budget that only works on paper will not work for long. Take a hard look at your monthly expenses and set your budget according to what you are actually spending. If you cannot make your budget work, you may have to adjust some categories, but, if you typically spend $100 a week on groceries, for example, it is unlikely that you will be able to cut that down to $30. Instead trim a bit from as many categories as possible, and, if the numbers still don’t work, consider taking on a part-time job or finding another way to increase your income until you can lower your expenses.
Determine Your Goals
What do you hope to gain from getting control of your finances? Are you trying to pay down debt? Build savings? Have a clear idea of what you hope to gain from mastering your finances, and prioritize your goals.
Budgets don’t work unless every expenditure is accounted for. In truth, it is often the small, daily purchases that bust the budget, not the occasional larger splurge. Knowing that you need to take the time to record every purchase also makes it easier to put the brakes on impulse buys.
Review Your Expenses
Initially, you will need to review your budget at least weekly. Once you have a comfortable budget in place, you may not need to check in as often. It is important, however, to keep an eye on your budget on a regular basis, so you will know if you are overspending in certain areas, or need to make adjustments due to changes in costs.
Plan Your Shopping
Making purchases on the spur of the moment, whether at the mall or the grocery store, are a sure way to blow your budget. One of the most important personal budget tips is to say no to impulse purchases. Before you do any shopping, take the time to sit down and write out a list, making sure that you’re covering your basic needs before adding any extras.
Plan Big Ticket Purchases
One recommendation from Concord bankruptcy lawyers is to carefully consider big ticket purchases before making them. If you don’t have the cash on hand to pay for the item outright, consider saving the amount your monthly payment would be while you price and comparison shop. Ideally, you will pay for the item in cash, but if not, you can at least save a substantial down payment, wait for the best price, and perhaps qualify for a period of zero percent financing.
By following these tips to avoid bankruptcy, you can ensure a more secure financial future for your family. While bankruptcy can offer helpful relief for many situations, adhering to a realistic budget is less damaging to your lifestyle and future.