Budgeting When You Become Bankrupt

commitment and it takes time, but you can learn to manage their money, even when there is not much of it. Follow these steps to set up a budget if you do not have money.

We talked about how to create a basic budget in the real world, but that advice often is not worth when you are struggling to make ends meet. The basic ideas are the same, but the breakdown of expenditure will probably look a little different, and each situation will be unique to them. So here’s what you need to do to get back on track.

First, assess your financial situation

If you have more money out than to arrive, here’s what your financial plan reduces spending less and / or earn more. To learn how first make an assessment of your income and expenses. This will help you develop a reasonable and realistic budget.

Categorize your spending

Divide your expenses in the last month. Categorize and separate the needs and desires. Separation helps you prioritize your finances. To have a clear idea of their needs and desires, consider creating a hierarchy of spending. Organize your debts, too.

Identify your spending problem areas

Take note of their habits. Are there some specific stores that you frequent? Do you have a coffee habit that can be cut? Often there are “leaks” in a budget that can be connected. The first step is to know where they are. The identification of these categories, and keep in mind once you start your budget.

Cut spending

Find ways to reduce your expenses. The first place to start is the category of “needs.”

It is important that you leave a little room for fun in your budget. If you do not, you risk-sensitive and that may make you want to quit completely. But remember: the key to managing your money when you’re broke is to reduce your lifestyle. If you can not afford to pay your bills, take a close look at what could be a luxury. Examples of wasteful spending:

  1. cable
  2. A mobile data plan heavy
  3. holidays

Once we asked Lifehacker readers: “When the financial course is difficult, what are the first installations to cut back on” Discover the answers?.

Lower the costs

Once the needs are out of the way, take a look at your needs, you can save a lot there, especially on their bills. Visit our guide ticket by law to save money on your monthly expenses for some ideas.

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Be frugal

When you’re struggling to make ends meet, frugality is your friend. Enjoy your money and things that are happening. For example, you can:

  • Stretch your meals: The New York Daily News around some of the best food choices when you’re broke.
  • Do it yourself: One of the best ways to reduce costs is to learn to do things yourself instead of paying for them. For example, you can save money by learning the basic car preventive maintenance, taking into housing projects, and make their own cleaning products and toilet.
  • Discount accommodation: You can negotiate the rent? Can you move to a cheaper place? Since this is probably one of the biggest expenses is one of the best ways to make a dent in your spending.

Your options vary. The point is to adopt a frugal lifestyle and seek to reduce costs.

Prioritize your money goals

Many people wonder if they should focus on the debt or savings first. The answer depends on your situation. However, the financial expert Sarah Location recommends at least build an emergency fund before tackling the debt. According to Bankrate:

“Place recognizes the difficulty of telling people to save” in an environment where they gain a fraction of a percent interest on their savings “during charging” usurious rate of wear more than 30 percent on their credit card. However, given the economic circumstances, difficult decisions must be made, “she said.”

The setbacks are inevitable. If you are not prepared for them, which can devastate your budget and finances? Although it may take some time to build an emergency fund, which will help you stick to your budget if a financial setback arises.

all experts agree that it is not better to focus first debt or savings. To see what works for you, read the full article Bankrate.

Dealing with debt

All you want to focus, do not risk your finances Unravel ignore your debt. fines and interest can turn a small debt in a landslide. Your debt should be a priority.

Select a payment method

You’ll have to come up with a debt repayment plan. To do this, first select a method:

  • The method of the “debt snowball” Pay your smallest debts first Seeing your debts paid down will help strengthen the momentum to move forward Lifehacker writer Melanie Pinola points out that a recent study.. showed that this method is effective.
  • The method of “avalanche debt” pay the debts with the most expensive interest rate as finance blog Ready for Zero said. “The Avalanche defenders point out that the debt can lose thousands of dollars by choosing not to meet their higher interest accounts. “
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Reduce your interest credit card rates

If possible. According to Bankrate, a national survey found that 56 percent of consumers to credit card companies have been called to request a lower interest rate has been positive. Bankrate reports:

“A phone call five minutes to the issuer of your credit card can save you hundreds or even thousands of dollars in interest.” There is no incentive for them to reduce their rates unless you call. The squeaky wheel gets the oil, “said Brad Dakake A consumer advocate with the Massachusetts Public Interest Research Group.”

It’s worth a shot. But beware of the interest rate of credit card scams also. According to the Federal Trade Commission:

“Mailboxes voice throughout the country are blocked by pre-recorded phone calls companies that claim to be able to negotiate lower interest rates significantly with credit card issuers, if only pays a commission for the first time.”

Request extensions or payment plans

Say you are behind on bills, debts or rent. Investopedia suggests that working something with your provider, lender or owner:

“Do not be afraid to ask for extensions invoices or payment plans. These requests are often granted. If your main concern is the removal of your apartment, tell your landlord, but, also, see if you can get extensions on other spending free money to keep her home. “

The catch may derail their other financial goals. But the most important thing is to keep your debts organized and lead to a plan on how you will address each one.

Call your plan

Every penny is accounted for, then your pretty tight budget. At this point, a traditional budgetary strategy may not be appropriate for you. But miss ruin your budget, either. Avoid the following errors:

  • Do not be realistic: crunch the numbers. Set a reasonable amount of one side of each of your expenses. Maybe he eats for $ 25 a month taking extreme measures. In fact, they are probably not going to work. Do not agree with failure.
  • Cut all the fun: It is important to give some respite. The money for 20 years said: “You may have to limit to twenty dollars per month if your budget is tight, but … this accessory little money can avoid feeling deprived, which can lead to overspending” .
    The amount of breathing space depends on your situation. But it should be sufficient to prevent blowing your budget. Set aside adequate but modest response, quantity.
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Once your expenses and goals are in place, it’s time to write your plan. JD Roth of Getting Rich Slowly shares his tips:

“I started making a list of my debts in the order you want to pay … So I made a list of my sources of anticipated revenue. Finally, I was inspired by a possible plan of attack. “

Make your own plan of attack. Once you choose your strategy for the repayment of debt, an amount of each debt. Calculate how long it will take to remove all of them, with your budget in place. Breaking goals into smaller milestones which make them easier to achieve.

Seizing opportunities

Part of the money management when you have the money increases your income. For example, you might be able to:

  1. Get a better job
  2. Calls for an increase
  3. Sell your stuff
  4. Find a side gig

These options are not available to everyone. But ultimately, it comes to be spiritual. Look for opportunities to earn more and save more money. Then these opportunities. Sometimes it can be more like sacrifices.

Here is a personal example: My mother struggled to survive in their 20s. She was getting up alone and working full time in a grocery store. Somehow, she was able to save up to $ 10,000 in a few years. I asked how he did it. Part of it, he said, is the use of every opportunity that came to him. She worked overtime. She took a job at Stop-N-Go. Unexpected windfalls have savings. He called these “windfall”. Most people do not see overtime as lucky, but my mother was committed to your financial goal. So I put everything in terms of achieving this goal and took advantage of anything that might help.

If you are depressed about their lack of funds, keep this in mind: many of the best stories begin with success be broken. Come up with a plan. Set small milestones. Seize opportunities. In general, this will help you take control. Once you do, you might be surprised by what you accomplish.