After filing for bankruptcy and completing your Credit Counseling and Debtor Education courses, you are well on your way to a fresh financial future, equipped with the tools and knowledge to effectively manage your finances and best avoid any future financial pitfalls. Budgeting is a great tool to help stay on track, and it really will transform your day-to-day life. Once you have started living on a budget, you will be learning to spend within your means – thereby maintaining constant control of your spending patterns and keeping the stress levels to a minimum! Here are a few tips from Affordable Bankruptcy Courses on how to most effectively implement your budget:
- Set a time limit for budgeting goals. In doing so, you are reinforcing the existence of the goal itself; it becomes more ‘real’. This makes it easier to break down the goal into manageable, bite-size chunks – and always remember to be specific. For example, saying ‘I will save up enough to put a deposit down on a new apartment’ is much more overwhelming than saying ‘each month I will put away $xx, and by such and such a date, I will have enough for a deposit.’ In being more specific, you are increasing the likelihood of you achieving that goal, as it becomes more manageable.
- List the luxury expenses in order of importance. If you need to implement a budget, chances are you cannot realistically afford to buy yourself every item on your wish list. So which ones take precedence this month? Practice the 30 day rule; a great way to control impulse spending. Do you still want the item after 30 days? More often than not, the desire to purchase it will have passed. A great way to save some extra money for the items you really do need!
- Are there any areas for improvement within your budget? Where can you cut down on your spending? The aforementioned 30 day rule applies here, too. And how about cutting down your monthly bills by being more frugal? Perhaps turn off the AC or heating system when you don’t really need it, air-dry your clothing instead of using the tumble dryer, sealing up the cracks in your windows (you can reduce energy costs up to 30% by doing this)…the list goes on. When examining how much energy we use, it is astonishing to see how much of it is wasted.
- Use cash. Every Monday, take out enough cash to last for the duration of that week, and forgo using a card when making any purchases. Adding a tangible element to the money and physically seeing how much you have left in your wallet to spend that week, will act as an incentive to not make any impulse purchases.
- Cut out your bad habits. Although much easier said than done, in cutting out those habits such as smoking and drinking, you can save yourself a lot of money. This is perhaps the way through which you can make the most difference to your weekly budget. There are many worthwhile tools online available to help you accurately track how much you are saving by giving up smoking, acting as a great incentive for you to make the cut to improve your bank balance – not to mention your health. On average, by forgoing smoking one pack a day you will be saving $112 a week – that is almost $500 a month. Imagine how else you can use this month – saving for that new car, house, school fees..? The list is endless.