How to Avoid Bankruptcy

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Being bankrupt is no fun, and can often lead to periods of high stress and worry for both yourself as well as anyone who is depending on you. Bankruptcy does not make you a bad person, nor is it a reflection on who you are. It’s instead a wakeup call to your brain to tell you to manage your finances better, and while it takes time it can be done.

First, as corny or as crazy as it sounds, make a budget. Write out your income, your goals, your expenses, and figure out where the money should go. Knowing exactly where that $100-dollar payment or that $50 gift from your father is going before it reaches your hands will help you feel more in control of your money.

Then keep the budget updated and ensure that all payments and expenses are written down and accounted for. Act just like a bankruptcy attorney Erie PA and you’ll manage money like one!

Next, create an emergency fund with any leftover money. These are savings that you dip into only during an emergency, and ensure that you outline what an emergency is to keep things contained. Having a buffer zone of a few thousand dollars will help you feel more at ease when the rocky times come ahead.

Finally, see where you can cut costs and go through a strategy to help avoid impulse purchases. If you see something that you really want, step away from any place you could order it and spend a length of time discussing it with yourself. It can be anywhere from five minutes to an hour but should give you significant time to think things over.

Go over the pros and cons of buying it, consult your budget, and understand that the item or its sale price isn’t going anywhere and will be back. At the end of the time, see if you still want it, and then buy it or let it go.