You've heard the words over and over: if you've declared bankruptcy, you need to learn how to live within a budget. Like with most things, a budget looks great on paper - yet can be one of the hardest things to follow, especially if you have a family. Fortunately, living within your means isn't impossible; with practice, you can make your budget work for your lifestyle, and even have some leftover income to put towards your savings. It's the best way to stay debt-free for life. Luckily, we've got the best tips and techniques for how to follow your budget.
Get ready to master the art of the budget and avoid declaring bankruptcy for a second time:
Track All Of Your Expenses
Sure, it can be a little cumbersome to track every expense - after all, who has time to record the big purchases, let alone that large coffee you bought at Starbucks? Yet if you want to master the art of following the budget - and trust us, if you've declared bankruptcy, you do - you need to religiously record your expenses, even the small ones. If you think that smaller purchases don't deserve your attention, think in terms of the bigger picture: one coffee a day can add up to over $60 per month. That's like a minimum payment on a credit card.
Set Aside Money For Fun
What's the first mistake that many people make in forming their own budget? They don't allot any money for fun - and if you don't allow yourself to live a little within your budget, you'll drop it faster than a hot potato. So before you completely cut fun out of your life, put aside a small amount per month as play money. If you have fun while following your budget, you'll be more likely to stick to it, which means that you'll be able to maintain the financial freedom you achieved by declaring bankruptcy.
On The Other Hand
There are tons of expenses that will eat up your budget, but aren't necessary. For example, do you enjoy going out to the movies every weekend? Like hitting up your local bar for a drink? Small changes in your habits can go a long way towards producing heavy-hitting savings. Instead of going to the movies, join an online service where you can watch unlimited rentals for a set price per month. Still want to enjoy your local bar? Hit up happy hour instead, where drink prices are significantly reduced. Cut out expensive restaurant visits - that meal will only last for twenty minutes, but the price tag will stay with you a lot longer.
Living life after declaring bankruptcy is all about making sacrifices. You do need to cut back with the spending habits that made you declare bankruptcy in the first place, but that doesn't mean you should start living a completely austere lifestyle. Just be responsible with your budget tracking, and don't spend your money on frivolous purchases like designer coffee and four-figure handbag purchases - remember, you want to stay out of debt, not find yourself back in front of the bankruptcy courts again.