For many Arizona residents in financial trouble, declaring bankruptcy is their path to a fresh start. But while it brings your debt under control, you still need to focus your efforts on bouncing back – and that means learning new habits that will help keep unexpected problems from sending you back into economic turmoil.
According to a recent article in Money Magazine, the path to financial stability is based on simple arithmetic: spend less and save more. Of course that’s more easily said than done. Here are five tips to get you on the right path:
1. Be realistic
If your financial problems arose from spending more than you could afford (even if it took a major disaster to push you over the edge), you need to be realistic about the lifestyle you can maintain on your income. If there is a dramatic change in your income, you need to reevaluate your spending rather than trying to maintain your lifestyle.
2. Get serious about making changes
Take a long hard look at your budget to see where you can cut expenses and save cash. Some people may need to cut out a few restaurant meals or cut back the cable bill, while others may need to give up a second car or even move into a smaller home.
3. Be proactive about your finances
If you start to fall behind on some payments, DO NOT bury your head in the sand. Pick up the phone before you bill is due and ask the creditor for an extension, a reduction in interest or penalties or to start a more affordable payment plan. The sooner you reach out for help the less damage you will do to your credit score.
4. Build a cash cushion
If you don’t have money set aside for an emergency you will be unprepared for the next emergency. Start out by having a comfortable amount automatically deposited in a savings account and ratchet the amount up over time. You should aim to have at least three month’s worth of expenses saved up.
5. Focus on long-term goals
Once you stop living paycheck to paycheck, you can start focusing on your long-term financial strategy. Do you want to go back to school? Buy a home? Start your own business? Picture where you want to be five years from now, and then chart out a course to get there.
A little self-reflection and financial discipline can go a long way toward keeping you out of financial trouble a second time. So take your fresh start and make the most of it. You deserve it!
At The Zolman Law, we believe that your life shouldn’t be defined by debt. We have helped hundreds of people just like you find the relief they deserve from harassing bill collectors, paycheck garnishment, foreclosures proceedings, and – most importantly – the constant worry about money and what to do about your debts.
We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona file for bankruptcy or work through tough tax problems every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing debt. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.