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Russell G. Small and Kenneth Lenz

3 budgeting tips for life after bankruptcy 

On Behalf of | Nov 17, 2021 | Bankruptcy

The decision to file for bankruptcy can have a significant impact on daily life. Often, the subject may be looked upon in a negative light. However, bankruptcy is often the most feasible option for those who find themselves in financial difficulty. 

Importantly, bankruptcy can provide an opportunity for a new beginning. Part of this fresh start will be to rebuild your finances as well as credit. One helpful tool to assist in this process is to set a workable budget. Outlined below are budgeting tips after bankruptcy. 

Have an emergency fund

While it may seem like a tall order to put savings to one side, little and regular amounts can soon mount up. Having an emergency fund means that you will be prepared for unexpected events, such as medical emergencies, car repairs, home repairs, or reduced hours of work. Having an emergency fund in place means that you should be able to avoid taking out loans and racking up further debts. 

Set yourself targets

Sticking to a budget can be extremely difficult at times, particularly when there is no prospect of a reward in sight. It is important that you allocate some money for enjoyable activities and affordable luxuries. Having something to look forward to can actually increase your motivation to save. Often, people find it beneficial to set goals and milestones, rewarding themselves once targets have been obtained. 

Allow for flexibility

Setting the right budget can be challenging, especially in the early stages of the process. It is not uncommon for people to completely forget to account for something important. As a result, it is important to have a flexible budget that allows for change. As time moves on, the budgeting procedure should become less problematic. 

It is important to remember that bankruptcy can present an opportunity for new beginnings. If you are considering bankruptcy in Connecticut, it may also benefit you to understand your legal rights

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