If you declare bankruptcy, it is crucial to learn how to budget in the future. If you use Chapter 13 bankruptcy and have a repayment plan, your budget is a critical part of determining how that plan should work and what you can afford. If you use Chapter 7 bankruptcy and liquidate your debt, your budget helps you make sure you don't wind up in debt again.
Either way, the budget helps. It can assist you in rebuilding your credit and moving forward with your life. Here are some key tips that will help as you get started:
1. Use a zero-based budget
Don't just use a loose budget and hope it works. A zero-based budget is one where you have a perfect balance between your expenses and your income. Taking away all of the expenses gives you a sum of zero. You know where every single dollar you make is going -- even if it's just going into your savings because you spend less than you earn.
2. Figure out your priority payments
Some things are necessities, and that's where you want to start. Examples include your mortgage and the cost of food. Begin there and then work your way down into things you would like to have but can, technically, live without: Entertainment, dining out, Netflix, etc. Finally, budget for things you want but do not need. On a tight budget, you may have to cut these things completely.
3. If you're married, budget with your spouse
You're not the only one spending your money -- or earning it. Talk to your spouse. Communicate every time you spend. Find out what expenses they have that you have forgotten. Most of all, make sure you both know what the budget looks like so that no one accidentally spends too much.
4. Learn from your mistakes
Yes, you had to file for bankruptcy. Just ask yourself why. Did you put too much on credit cards? Did you have unexpected expenses? If the bankruptcy had anything to do with your intentional use of money, work a fix into your budget to prevent it from happening twice.
5. Understand that every month isn't identical
Your budget does need a little flexibility. If you have a child, where do you get money for birthday presents? What about Christmas spending? Do the totals for your utilities change with the weather? Remember that a budget that works one month may not work the next.
These five tips can help you get started. Remember, there is life after bankruptcy, and it can be a very good life with a lot of financial stability. You just need to know what options you have and how they can help you moving forward.