Is it strange for bankruptcy lawyers to offer money management advice and tips? We don’t think so, because we would do anything to help you avoid having to file for bankruptcy. But avoiding it often means you need to get way ahead of it. If you know you are struggling or that hard times are on the way, learning how to better manage your money is crucial.
Money Management Ideas
There are four basic steps to money management that will help set you up for a stronger foundation, and it starts with knowing what your priorities are. You need to focus on something that aligns your money goals with your money habits. That focus is what’s most important in your life right now. Do you have way too much credit card debt? Then paying that down might be your priority. Are you living paycheck to paycheck with no savings? Starting a savings account could be it. Whatever concerns you most, make that your priority.
Next, you need to determine how much money you actually bring in each month. It may be hard to believe, but many people do not know this information. If you don’t have a concrete number, determine your monthly income after taxes. This will be easier if you’re a salaried employee with a regular paycheck, but contract workers or shift workers should be able to estimate based on their typical amount of work. If you have any side jobs or other sources of regular income, add that in as well.
Now comes the part most people dread. In order to get the full picture of your spending habits, you have to know how much money you typically spend each month and where it goes. Log in to your online banking, or pull out credit card statements, housing and utility bills, bank statements, ATM withdrawal receipts, and any electronic payment records. With a spreadsheet or pen and paper, total your expenses. Try to categorize them as well to get an overall picture of how much you spend on groceries, entertainment, transportation, etc. You might be surprised at some of your totals.
Once you know your true income and your typical expenses, it’s time to make a plan. Align the plan to your priorities identified at the beginning of the money management process. See where you can trim certain areas — say you go from eating out three or four times a week to just one — and funnel the difference into paying off that credit card debt or starting a savings account. Even small contributions will add up quickly if you stick with this.
We would also like to note that regardless of what your priorities are, we would always recommend having an emergency fund. You need easily accessible liquid funds, especially if you are anywhere near the realm of bankruptcy. You never know what might happen, and when it comes to avoiding bankruptcy, losing a job or a medical emergency can be what breaks you. We will always try to help you keep that from happening!
Discover Tom Bible Law in Chattanooga, TN
If you are struggling with excessive debt and looking for a sound solution, the attorneys at Tom Bible Law, can help you explore your legal options. We have helped numerous clients from Chattanooga and throughout Tennessee and North Georgia achieve their debt relief goals by guiding them through the bankruptcy process. We work with every client personally, giving each and every bankruptcy case the time and attention it needs. We understand the financial pressures our clients are facing and work to resolve their debt problems in a favorable, cost-effective manner. Our bankruptcy lawyers have more than 80 years combined experience and are here to help. Call us today at (423) 690-7712 or drop us a note here.