As an Asheville bankruptcy lawyer, I hear it most days from potential clients: “I’m working hard every single month, but after I pay my bills, there never seems to be anything left.”
Everyone I meet with during a free, initial Asheville bankruptcy consultation is living on a budget. Some folks, like my amazing co-worker Michelle, track every dime they have down to the penny and they know where their money is going each month. Most others have a notion about where their money is going, but have not reduced it down to black and white on a single sheet of paper yet.
Fear not, by creating a budget you can determine the necessary steps to create positive cash flow each month. We create a budget together when you ask my office for help because it is a key ingredient to a bankruptcy petition in Chapter 7 or Chapter 13. You do not need to wait to file a bankruptcy case however, you can create a budget for yourself right now. Here are a couple of tips for you to consider before starting.
Keep track of entertainment expenses.
Entertainment is essential in this day and age. Some folks spend money on premiere cable tv. Others prefer data plans on their smartphones. Some others like to spend extra cash on camping trips in the woods. Almost everybody eats out occasionally or goes on vacation to visit friends or family. The key to creating a solid budget is to dedicate a line item so that you know what you’re spending. That way, you can make a choice about what type of entertainment is most important to your family and cut out the things you don’t use or can’t afford.
Determine what you are paying in credit card minimums, but don’t include those in your monthly budget.
If you have a balance on your credit cards, you are paying for last month’s expenses, this month. Almost everyone I meet with has put groceries, power bills, entertainment expenses, or similar budget items on their credit cards. By placing credit card payments on the budget, it blurs the line on what you are spending each month for each line item, because some of the expenses are being counted twice.
Imagine that you had no more credit card, personal loan, medical debt, or unaffordable secured debt payments for expensive cars or houses. Would your budget work moving forward? If so, it’s a good idea to consider a bankruptcy case, and I would be pleased to speak with you during a free, initial bankruptcy consultation.