What if we told you it is possible to bounce back after bankruptcy? Better still, what if we gave you smart and easy-to-follow tips to get back on track? Take hold of your finances and recover from your bankruptcy, and more importantly, never make the mistakes you made earlier.
Here are three tips you would want to keep in mind:
Make a budget
You cannot get hold of your finances until and unless you know how much money is going where. Are you spending more on entertainment? Or perhaps travelling? Find out where you are spending more than you should. To do this, you need to first define how much you can afford to spend every month in total and then on each individual aspect, like travelling, food, clothes, entertainment, etc.
Once you have created an overall budget and a separate budget for each item, simply track your spending on a day-to-day basis. You can create an excel file, list your daily spending under the right field and add up the total. After a few months, you would have a clear picture of where you are spending more than you should. And now you know what to do next. Cut down on your expenses where you are going overboard with your spending.
If bankruptcy has one impact that can help you recover, it is this. Credit card companies will often not offer you credit cards after you have filed for bankruptcy (though this can and should change after a few years), so you would have to deal with your financial matters in cash.
The thing with cash is that when it goes, you can see it happening and you consequently become affected by it. You are less likely to overspend when you use cash than credit cards.
Ask friends and family for help when you need short-term loans
Temporary financial emergencies can come at any time to anyone—and they usually do, especially when you are recovering from bankruptcy. As mentioned above, it will not be easy for you to obtain financial help from banks and credit companies due to your bankruptcy. However, a financial emergency requires you to get a hold of money urgently and quickly.
While banks and credit card companies will reject you, licensed money lenders will often offer more options for you because they have less stringent requirements for giving out a loan. The downside is that depending on the money lender, some may charge a hefty interest rate. When you are already in a difficult financial situation, the last thing you would want is to have high-interest rates adding to your burden.
That is why, for small financial emergencies, it is best you seek help from your friends and family. And if that is not feasible and you must take a personal loan, it would be best to take a fast cash loan like payday loans from a licensed money lender. A payday loan is taken against next month’s pay and the owed amount is to be returned when you receive your next salary. This feature ensures that you pay back on time and do not fall back on repayment.