Bankruptcy provides you with the chance to start over and reduce your debt. Moving away from the stress of creditors asking you for money and into a newfound freedom can bring life-changing opportunities.
Because you may have had to use a substantial amount of your assets to satisfy the terms of your bankruptcy, your will need to rebuild your financial reserve. Knowing some of the strategies for doing this can help you prepare for your future and regain your financial independence.
Live within your means
While there may have been extenuating circumstances that resulted in your need to file for bankruptcy, reconfiguring your budget can help you to avoid uncontrollable debt. Money Crashers suggests that you break your budget into three categories including the following:
- Fixed expenses such as car payment and rent
- Variable expenses such as gas and entertainment
- Irregular expenses such as medical bills or holiday gifts
Practice frugal living while you rebuild your reserve. Rank your expenses in order of necessity. Once you have a steady system of paying for your expenses and you still have money left over, implement a savings plan.
Diversify your savings
You can save money in a variety of ways including a savings account, a company-sponsored or personal retirement account, and investing. Once you are able, identify a realistic number you can contribute to your savings on a regular basis. As your income grows or you adjust to your new budget, you can modify this number and increase it to grow your savings faster.
Investing can provide opportunities for you to capitalize on the monetary value of your assets. Think strategically when you consider new investments to verify that you have adequate money left over to continue paying for your necessities without going back into debt.