Maryland readers already know the benefits that can accompany the decision to file for bankruptcy. Not only can consumer bankruptcy lead to the elimination of many forms of consumer debt, the process also gives individuals and families a fresh financial start. Savvy consumers will take this opportunity to make adjustments in the way that they handle their finances, which will help avoid future financial trouble.
The first thing to do in the months that follow a successful bankruptcy is to make a full assessment of all family income. Next, chart out all recurring monthly expenses, including those items that often get overlooked such as food and entertainment costs. Once these numbers are in hand, it is possible to create a budget.
Be sure to include savings within the monthly budget plan. Set aside money to create an emergency fund, which is not to be used for any expense other than unplanned costs such as car repairs, medical treatment and similar urgent matters. Create a separate savings account to fund expenses such as holiday gifts, charitable donations and other costs that arise throughout the year.
Many people find it easier to save when they do not have immediate access to the funds that are designated for savings accounts. This can be accomplished by setting up different accounts within one’s bank, and having a portion of each paycheck automatically deposited into these accounts. It may also be helpful to avoid checking the balance more often than necessary. Think of these funds as simply unavailable for use, the same way that taxes, retirement savings and other deductions are pulled from each paycheck.
Consumer bankruptcy brings a fresh financial start to those in Maryland who choose this powerful financial tool. However, the benefits of bankruptcy will soon fade if consumers do not take the proper measures to adjust their spending and savings habits. By implementing the tips given above, individuals can take full advantage of the second chance that bankruptcy brings, and move forward with a stronger financial foundation.
Source: The Kansas City Star, “Money Matters: Six tips to help you live within your means”, Jaime Bosse, Nov. 5, 2014