If you’re in over your head financially, a good bankruptcy attorney may be able to get all or most of the debt discharged. A great bankruptcy attorney will take it one step further and help you implement measures to avoid ending up in such a precarious position again. There are various strategies for getting ahead after regaining your financial footing, but the most effective way to stay on track is by devising a budget. If you want to manage money better, here’s how to get started.
Be Honest About Income & Realistic About Expenses
When creating a budget, you first need to add up your household income. How much are you bringing home every month after taxes? If you receive anticipated bonuses at regular intervals, you can include them in the calculations as well; however, you should not bank on sporadic windfalls when devising a financial plan.
You also need to be realistic about your expenses. For example, in addition to covering the absolute essentials like housing, food, and health insurance, you will likely spend at least a little every month on entertainment. You may even take a short vacation, not to mention have to cover expenses like birthday gifts.
It’s also wise to put aside some money every month for unanticipated expenses like vehicle repairs and home maintenance. Having a savings account will help you avoid going further into debt when the unexpected happens. It is recommended that most households build a 6 month emergency fund for these types of expenses.
Use a Portion of Every Paycheck for Each Obligation
Once you determine total household income and devise the most exhaustive list possible of anticipated expenses, it’s time to start allocating funds. Most Americans have four primary financial obligations: needs, debts, savings, and wants. Financial planners often advise clients to follow the 50/30/20 rule when creating a budget, which means putting 50% of all income toward needs, 30% toward wants, and 20% toward debts and savings.
Depending on your particular goals, these figures may be adjusted. For example, perhaps you want to take a more aggressive approach toward paying down debt, or maybe you want to focus on saving to retire early.
While sticking to a budget can help you stay on track financially, it may not be enough to get ahead. If you’re struggling with debt, turn to Greg Dunn, Bankruptcy and Debt Relief Attorney to explore your options. Practicing out of Honolulu, this Oahu native has helped more than 12,000 clients get out from under insurmountable debt. Whether you’re facing foreclosure or thinking about filing chapter 7, you can count on this bankruptcy attorney for strategic guidance every step of the way. To schedule an initial consultation at his firm, call (808) 524-4529. To learn more about his experience as a bankruptcy attorney, visit his website.