It may seem like bankruptcy is the end of the world, and like you’ve hit the bottom and there’s no coming back. But actually, it might just be the break you need to escape your bad old habits or problems that drove you to bankruptcy.
In order to find out more about how to deal with this issue, we decided to talk to the bankruptcy experts at the Law Offices of Mark L. Miller in San Diego and gain some insight into how to best act in these scenarios when you are trying to recover from bankruptcy and have a fresh financial start.
Stabilize Your Budget
Beginnings are always hard and changing your habits when it comes to spending and dealing with your monthly income would have to change. You should sit down and write down how much you can earn and how much you can put aside every month in savings. Then you need to take the rest of the money and carefully plan how you are going to allocate your resources in order to learn to spend only on necessities and not more than you have. It is hard to do that in consumer’s society, but it’s not impossible, and this turning of a new page would open up new possibilities and you’ll probably even learn a thing or two about money and how it makes the world go round.
Separate Your Wants and Needs
This is a very important step in the recovery. This distinction is the key to saving money and getting back on your feet. It is easy to spend money very quickly and worry about it tomorrow, and then bankruptcy happens and you are acting all surprised. You need to learn to be disciplined when spending and to make a difference between what you need to survive and you desire.
Some people think it’s the same thing, it’s not, you need food to survive, you don’t need a new cell phone if the old one is still working. Until you get back on your feet you should dedicate a drastically smaller amount of money on the fun stuff. As mean as it sounds, try to focus on bare necessities and taking control of your life and spending.
Destroy Your Credit Cards
Not literally by any means, but you can do that if you like. Owning more than one credit card is a rabbit hole. Just one more thing and I am done, I’ll think about the consequences when the time comes. Well, the time has come. Having access to credit cards is typically a hindrance for people trying to recoup their finances after such a financial blow.
As I mentioned earlier, it is hard to resist the urge in a consumer’s society where everything revolves around buying stuff you don’t need. Keep a credit card, but use it for emergencies only, when you absolutely have no other option but to use it. This way you will gradually reduce your debts over time and feel much better about yourself.
Develop Smart Shopping Habits
If you’ve not picked up a theme, it’s all about habits. Breaking bad habits and developing new ones that will benefit you. Case in point, when going shopping, make another grocery list, see what you use often and in greater amounts.
There are certain items like toilet paper or soap which will always be used. This is the time to be smarter and buy these items in bulks. You are going to spend more money initially but you are saving in the long run. Also, look for discounts. You don’t have to buy impulsively due to fear of missing out. Be patient, wait out a bit and the item you desire will be discounted.
Soon, you will notice how your credit score is improving and how you’re able to get back to normal life. Hopefully, some of the savvy money-saving habits will stick with you.
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