Guest Contributor

How to Manage Your Finances After Filing for Bankruptcy

By | Amy Sloane | Freelance Writer

Bankruptcy can disrupt your finances, making it hard to figure out what to do next. The following guide will help you manage your cash after filing for bankruptcy.

Budgeting Effectively

You didn’t file for bankruptcy for no reason. There was a succession of events that led you down this regrettable path, and now you have to rethink your finances. The first thing you want to do is rethink your budget. There’s probably a lot you can do to move cash around so that you aren’t in this position again.

Try to set more money aside to pay down any debt. Make sure you don’t get too many credit cards so that you aren’t overwhelmed later on. Many online resources can help you build an effective budget. If you had a budget before this happened, take that out and use it to guide you. Chances are you’ll see where you went wrong, and you’ll be able to correct the issue.

Outsmarting Debt

The reality is debt negotiation is often better than filing for bankruptcy. You get to keep all assets this way. Sure, there are debt settlement pros and cons to point out, like how creditors could ultimately deny consolidation.

Still, this doesn’t mean you can’t take some of the pros linked to debt consolidation like debt negotiation. You’ll have to learn how to talk to these folks, but if you ever get in debt again, you can use some of these tactics to try to reduce how much you owe. Debt is not your friend. Do your best to not only reduce it but eliminate it from your life as much as possible. Whatever you can’t deal with on your own, leave that to professional debt consolidators.

Savings is Key

You know it’s important to set aside money for a rainy day. This is the cash you can depend on if you fall short on your payments if you have to deal with an emergency. Bankruptcy helps you to start over, so try your best to take advantage of this.  

Ideally, you’ll be saving at least 10 percent of your income, but if you can find a way to set aside more, then make sure you do so. Once you’ve got a sizable savings account, set your eyes on building a good retirement account along with an emergency savings account. Having various savings accounts is a good thing.

Cut Costs

It’s vital to cut costs as much as possible. There’s always something you can do to reduce the amount of cash you spend in a month. For example, you don’t need more than one streaming account, and you don’t need a gym membership when you can run for free outside.

Your living expenses can be reduced if you’re willing to rent out a room every so often to folks who visit your area. Your car costs could also be lowered if you decide to rent your car out using car-sharing sites. You can also eat out less. Some of these cuts are going to hurt, especially if you’re accustomed to a certain lifestyle, but they’re important.

Talking to Professionals

You can do a lot on your own, but you should consider talking to a professional financial planner or guide. This person can help stabilize your finances after going through a traumatic event. A financial planner can help ensure you stick to your budget and should be able to help figure out a few other things. For example, these folks can advise you on how to invest your cash and assist you with drafting your estate plan.

You don’t have to invest too much if you don’t want to but a bit here and there is wise. Yes, investing is a gamble, but you could also end up creating an additional stream of income. Having more cash means less stress, and that’s something everyone deserves. Try to learn as much as you can from one of these individuals so that you can apply their knowledge on your own. Read some reviews before contacting one of these individuals, and have meetings until you find the person who feels right.

Managing your finances after going through something like this isn’t going to be easy, but it’s not impossible. Give yourself some time, try to learn from your mistakes, and you’ll move forward before you know it.

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