The debt has been erased, the phone calls have stopped, and you have resolved to keep your future debts under control. Whether the problem originated from a divorce, overwhelming medical bills, or the habit of living off your credit cards due to an unforeseen unemployment, bankruptcy can be the solution that helps put you back on level ground. Things should be looking up for you, yet you still have that stigma to your credit score.How can you move beyond that creditor’s red flag to rebuild your financial security? These few tips for living life after filing bankruptcy can help keep you on the right track.
Develop and stick to a budget
Many people create a budget with intentions to get their spending under control. When thinking of your budget, remember that it’s more than a record of your expenses and incoming wages; it can be a great tool to see where you are able to cut your spending. Perhaps it’s those daily morning stops for coffee, your monthly cable bill, or stepping out of the office every afternoon for a bite to eat that are gulping up your extra income. Making a budget together with a detailed record of daily spending will help find ways to cut spending so you can be successful in your money management. Having trouble beginning? There are many resources available online as well as in print to assist in creating a personal and household budget.
Stop feeling as if you need to keep up with the neighbors
Sometimes living below your means is made difficult by the urge to keep up with those around you. Having all the “toys” the next door neighbors own, making sure your kids can compete with their peers, and buying the newest and greatest car or electronic device all seem like things everyone aspire to; yet these things can quickly make living within your budget impossible. Remember that it’s okay to say “no” sometimes, and using last year’s model of phone might seem like the end of the world to your son or daughter, but it’s not. You would be surprised at what can be cut from your expense budget while still letting your family live comfortably. It just takes a little bit of creativity on your part to make the transition in your household go smoothly.
Get a secured credit card
The benefit of this type of credit card is that it helps in that all important step of rebuilding your credit while preventing you from the dangerous “out-of-control spending” that can derail your efforts. How it works is you deposit a set amount into a bank account. Then by making small monthly charges and paying on time you will begin the healing process to your credit score.
Let go of the guilt
Often times people who file for bankruptcy feel like a failure or guilty that they could not resolve their debts. Questions like “How did I get to this point?”, “How will I face my family and co-workers?”, or “How can I get beyond this huge setback?” can paralyze a person into a state of inaction. Instead of dwelling on the negative feelings that can accompany bankruptcy, try focusing on the chance to move your financial security along a positive path. By adopting a positive attitude and becoming an expert on your financial records are both great places to focus your energy and effort.
Photo Credit: Flickr/Fried Dough
