Bankruptcy is never welcome, especially at times like these when the economy has been shaken due to the Covid-19 crisis. Still, it’s not the end of the world, there are options you can apply to your consumption habits, and over time get back to your feet.

I wanted to learn more about how I should manage my income, and bankruptcy attorneys in San Diego I reached out to, gave me some heads-up on how to best deal with the situation and organize my resources. Here’s how you should behave when you declare bankruptcy:

Organize Your Budget

This the most important measure you need to take. Every person should do this, especially if you’ve never really cared much about how you spend your money. Now it is crucial to organize your budget in a way that you can cover all your fixed monthly fees like bills, mortgage, etc.

The rest of the money will be used for food and basic needs, and also remember to leave something on the side, in case of emergencies. It can be difficult at the start, but with a little discipline and some relinquishment of seemingly necessary stuff will soon put you on the right path. You can use an app or simply write things down on a paper and then consider your available budget whenever you plan to spend money.

Go Back To Using Cash

By using cash only you can directly limit how much money you are going to spend when you go shopping. It is visible when it’s gone and it creates a psychological barrier that prevents you from spending ‘’ more than you have’’ which had initially led to the current situation.

You don’t have to strictly use cash, online purchase is still reserved for credit cards, but when you want to buy something in person, make a habit of spending cash rather than cards. You will realize that you can get by simply by buying stuff you need and save money.

It is a good feeling knowing that you spent money smart and without regrets. When you start getting a hold of your budget you can allow your cards to re-emerge but be careful, it is still a slippery slope.

Prioritize Your Bills

Paying your bills in time will send a clear message that you are a responsible person which will positively affect your credit score. Not only that, but it will also allow you to better organize the remainder of your monthly income, and never again fall in the trap of spending more than you can afford.

Make sure you pay the bill as soon as it comes, there’s no need to wait or spend that money on something else hoping that the bill would pay itself eventually because it won’t. If you still can’t ‘’force’’ yourself to rearrange your expenditure this way, you can opt for auto payment, meaning that the money will automatically be reserved for bills every month.

This way you can learn to manage only the amount remaining after you’ve covered your obligations.

Limit Your Credit Card

The so-called secured credit cards are pretty useful for people with a lower credit score. It allows you to limit your monthly expenditure to a certain amount. This is good both for you and the lender since you will have to think about how you are going to spend the money, and the lender is not going to lose money on you. Eventually, when you get back your feet and adjust your spending habits, you can get back to a standard credit card.

Look For Discounts

Although you might have never cared about discounts on things like groceries or some basic services, this is the right time to reconsider. Even though they might seem small, the amount of saved money will increase, but instead of looking for a way to spend it you can put it aside and build a foundation for your recovery.

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