How Do I Get my Financial Life Back on Track?
Life after bankruptcy can result in a lot of lifestyle changes, but it can be the perfect opportunity to start a new chapter in your life. However, how do you get your life back on track after being derailed by bankruptcy? While it might be an adjustment, bankruptcy can be overcome gradually and with a bit of patience and diligence.
Here are some tips to get your financial standings back on track after filing for bankruptcy.
- Address what lead you down the path that ended in bankruptcy. The only way to understand where things took a turn for the worse is to take time and exam the root of the issue and come up with a plan to stay on the straight and narrow. Some common causes of bankruptcy include: job loss, medical expenses, divorces, student loans and credit card charges.
- Create a budget. After figuring out what took you down a slippery slope of spending, the next step would be to figure out a budget to make sure all bills are getting paid while still saving money each month. Research by the Urban Institute shows that having as little as $250 in savings for an unexpected expense can protect families from resorting to payday loans or running up credit cards, which can start a new debt spiral.
- Become friends with your credit score. Knowing your credit score after filing for bankruptcy can be painful to acknowledge but it helps when looking for errors and inaccuracies. Also, over time you can see your credit score improve!
- Start new. If you are looking for a fresh start that is filled with financial security, opening a new bank account would be the ideal opportunity to practice sticking to your budget and good spending habits. According to life hack, while opening the account, you should talk to the banker and make sure that you sign up for an automatic online bill payment. This will ensure that you are prioritizing that bills get paid on time.
- If credit cards are a part of the reason that you filed for bankruptcy, start using cash or limit your credit card use. Having a limited amount of cash on hand each week is a great way to keep you on your designed budget and prevent you from charging more than you can afford on a credit card. If you are going to use a credit card to help boost your credit score, start off by just using it on one regular monthly expense, such as gas or groceries. If you feel confident in limiting your usage, make sure you also remember to payoff the credit card in full each month to avoid any interest costs. By doing this, you avoid additional interest costs while building your credit. You can also earn points and/or cash back from the credit card provider.
Contact us today to begin your journey to becoming debt-free!