Step Two: Live within a budget and use cash for all your spending needs

There is a common misperception that people who file bankruptcy have misused their credit or spent carelessly. In your experience, a person’s spending habits have little, if anything, to do with why they filed bankruptcy. Eight out of ten bankruptcies today are triggered by unexpected medical bills, illness, unemployment and/or divorce. Most of the people we meet who require our services do not have a problem with spending, they just have experienced a rough patch in their life which sent them into a downward financial spiral.

Notwithstanding the above, bankruptcy provides you with an opportunity to wipe the slate clean and start again financially. In this regard, it is a good opportunity to reassess your financial priorities and outline a budget to maintain a healthy financial lifestyle. You may have to sit with your family and discuss your financial goals. We recognize that this may not be easy considering the social, cultural and emotional pressures upon America’s middle class. But now is the time to reprioritize your finances. 

Budgeting takes determination and discipline. Controlling spending and saving money are essential after bankruptcy. There are many subtle changes you can make to your spending habits to save even just a few dollars a week. Many people can reduce their monthly expenses by simply avoiding impulse buying, paying cash for things and preparing more meals at home. There are also many ways to reduce fixed monthly expenses like insurance and transportation costs. The professionals at P.R. Smith Law Group will provide you with budget counseling upon completion of your case.