When you are headed down the road toward bankruptcy, your situation can be very frightening. But before you wind up bankrupt, there are several tips you can use to secure yourself financially. The following five tips can help alleviate some of your debt and get you on the road toward debt relief and financial security.
Design a Budget Plan
The first thing that anyone needs if they want to succeed financially is a buring desire to get out of debt and do whatever is necessary without that desire everything else is just wishful thinking. The second thing is a budget plan. First, figure out how much money your family makes per month (after taxes, SS, etc.) and then go through your past receipts and bank statements to determine how much you spend per month. Finally, decide how you can work your spending habits better to spend less than you earn while allowing some left-over money to go towards your debts.
Use online resources and spreadsheets to manage your budget. Specifically try online budgeting tools like Mint.com that offer overviews of all your bank accounts, investments, debts, and loans. This site gives you a comprehensive overview of all your bank accounts while allowing you access to spending habits, budgeting tools, and financial advice. It tracks your spending via your bank statements. Identity theft should not be a concern because it merely allows you to review bank statements and spending. It is not possible to obtain personal information or make money transfers, so it is a safe way to manage and track your income and expenses.
Cut Out Unnecessary Spending
An important part of your plan to avoid Bankruptcy is cutting your spending where you can. Make a list of what you absolutely need each month, such as groceries, gas, and bills. Then make another list of what you actually spend money on each month based on your bank statements this will give you an idea of where you are spending your money and areas where you can cut some spending. Every month, find one area where you will plan to cut back spending, such as fast food or entertainment. Make a specific goal of how much less you will spend that month in that particular category, and stick with it. Repeat this every month with a new category until you are saving money in several different areas of your life.
Understand Your Debts
Another important part of avoiding bankruptcy is understanding and familiarizing yourself with your debts. Make a list of all of your debts and how much you owe on each account. Design a payment plan to eliminate your debt, and keep track of every account that you have a balance on by tracking account balances and deadlines. List all your debts with the soonest due date, and pay those off first. Lessening the number of accounts you have debt in can help give you a goal of what to pay off first and motivation to become debt free.
Prepare For Emergencies
One of the things that can turn a lot of people toward bankruptcy is financial emergencies. No one can foresee when they might need to make an emergency payment, and this can put people further into debt. Start an emergency fund to prepare for large expenses. If you don’t have enough savings in an emergency, you might have to turn to a payday advance, which carries high fees to help get you through, so always have a plan on how to pay off the bill.
Turn to a Professional
If you still see yourself headed toward bankruptcy, you might want to visit a professional such as a credit counselor to help you eliminate your debt. These professionals can give you personalized advice as well as help negotiate with your creditors.
See also:
- The Wealthy Buy Assets, the Poor Buy Liabilities, and the Middle Class Buy Liabilities Believing They Are Assets
- Car Insurance Savings That Most Drivers Overlook
- Bad Financial Advice Abounds
- High Performance Savings Accounts
- Teaching Your Kids Money Management Skills
Recommended Books:
- Millionaire Babies or Bankrupt Brats: Love and Logic Solutions to Teaching Kids About Money
- The Real Crash: America’s Coming Bankruptcy—How to Save Yourself and Your Country
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