Do you think you have no money left? Are you planning to file for personal bankruptcy? Filing for personal bankruptcy surely is one of the easiest ways to get out of debt, but to avoid all the hassle in the process, read the tips below that might help you avoid filing for personal bankruptcy altogether.
Plan a Budget
An essential requirement for managing your finances is to create a budget every month before you receive your monthly income. Money that is told what to do before it lands into the hands of its owner lasts longer and keeps your finances stronger.
Many people face bankruptcy not due to unexpected medical bills or sudden unemployment but due to poor spending and saving habits. The simplest way to devising a budget is to sit with a pen and paper and list down your expenditures. People often use spreadsheets or fancy software applications. The important thing is not what you use but that you use it.
Look at Necessities Rather Than Luxuries
Take a look at your expenses and notice which items are your necessity and which are a luxury. Many a time, we tend to spend on things that are not necessary to buy. Gather all the items you think you can quickly sell to pay for any cash shortages you are facing. These may include your books or CDs collection which you no longer read or watch or any other item that is no longer in your use. Gather the amount and spend it wisely; it will give you some relaxation and enable you to think of other ways to avoid personal bankruptcy.
Stop Using Credit Cards
You shouldn’t be using credit cards in any way. Destroy or cut your credit cards, even the one you have kept for emergencies. Credit cards are the biggest source of personal bankruptcy due to the debt a person accumulates by using them incorrectly.
People keep credit cards to use in case of emergency, but their definition of emergency evolves as they start using it. If they do not have a credit card, their definition of an emergency will be much stricter.
Increase Your Income
If you still do not have enough money left to pay for your living after reducing your expenditures, it is time to maximize your revenue. It can be done by opting for another job apart from the one you already have, working overtime, or asking your spouse to help you by taking up a job.
You need to keep your pride and ego on the side and do stuff you might have never thought of. It may include mowing lawns, delivering pizzas, washing dishes at a restaurant, painting houses, etc. This situation will only remain for a short period so that you can get out of the long-lasting curse of personal bankruptcy.