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What I have Learned After Filing For Bankruptcy Protection

07th May 2011
By Steve S in Bankruptcy Law
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After becoming debt free post bankruptcy filing, does that mean you have the green light to accumulate debt that you cannot pay for again? You should never ever put yourself in such a big financial abyss that you will have to reconsider filing for bankruptcy again. You must wonder if there is anything you can do to avoid going into huge amount of debt again?

Set A Reasonable Budget For Yourself

This is easier said than done. People do not use a budget for many reasons. Some people just do not understand the power of having a budget and how it can help you control your spending and put you on a sound financial path. What should be included in the budget? A budget comprised of tracking every single expense you will be incurring. You will be able to lump the expenses into assorted expense categories after several months of time consuming expense recording. It becomes visually clear if you can summarize all your expenses into numerous categories such as utilities for the home.

The benefit of a budget is the ability for you to know what expenses you are incurring on a monthly basis. Only through the use of a reasonable budget, will you be able to know what monthly expenses you have. You will also then be able to tell if you have anything left over to save for a rainy day or if you have to touch your savings to cover the expenses. Ideally you will want your expenses to be much less than the money you are making monthly. Through the use of the budget, if you find yourself in a situation where your expenses exceed your income, you will want to find ways to reduce the expenses so that you will positive net income monthly. By doing so, you can help yourself to avoid accumulating debt and in the long run avoid any chance of filing bankruptcy again.

Save Money Creatively

Go through your expenses and find creative ways to cut back on the expenses. For the purpose of this discussion, we will just concentrate on 2 things, food and entertanment.

Be frugal about food expenses

No one can go without any food for extended period of time. You can save money without having to starve yourself. It is possible for you to save quite a significant amount of money if you buy the generic or store brand product instead of the nationally recognized brand. You do not have to buy Quaker oatmeal for $5 a box, but you can buy a store brand oatmeal for about $4. Do not look at this $1+ as chump change as every little savings add up in the end. This is the quickest way to save some money, so to avoid finding yourself in debt and you will need to file for bankruptcy again.

Save money on entertainment

If you a movie buff and likes to watch that latest movie in the theater, you can also save money by not paying the full price of the movie. Ideally if you can wait for the movie to come out on DVD, that is the best way to save. If you can watch that movie during the matinee showing, it will allow you to save at least $2 or $3 each time. Also avoid buying food from the concession stand, as the markup on the food is astronomical. If you can cut back on the expenses, and save all the time, then you can avoid any chance of needing to file for bankruptcy in the future.

Cash Is King

A good way to avoid landing yourself into heavy debt is to avoid using credit cards and only use cash for all the purchases that you need. You will never "overspent" if you are only using cash for all purchases, and this also mean that you will never accumulate debt again. When you rack up huge amount of debt on your credit card, you have a better chance to need to seek for bankruptcy protection. Be smart about your finances and only spend on what you can afford and you will not find yourself in financial ruin.

Do not be afraid to look for new ways to save money. Remember the old saying "a penny saved is a penny earned". If you do not ever want to put yourself in a world of financial disaster, then do not accumulate debt anymore so you will not have to file for bankruptcy shelter. You should be smart about your finances in the future. Do not accumulate so much debt that you will need to file for bankruptcy protection.
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