Thomas F. Miles, Attorney and Counselor at Law
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Approach finances in a new way after personal bankruptcy

The feeling that comes when an individual emerges from bankruptcy is often a heady mix of relief, gratitude and a sense of a new beginning. Personal bankruptcy gives individuals a chance to shed unmanageable debt and start anew, but future financial success often depends on making changes to the way that one views spending and saving. The following tips are offered in the hopes of giving California the tools and information needed to create a solid financial future.

One of the most important post-bankruptcy tasks involves the creation of a comprehensive budget. Far too many people simply handle their money on an "as-needed" basis, paying bills and spending funds without a clear idea of how much is coming in and how much is going out. The first step in gaining control over one's finances is to understand the full range of income, expenses and debt levels.

Once a budget is complete, many people find it helpful to track their expenses over a period of months. By examining where money is being spent, it is possible to identify areas where spending can be reduced. The money that is saved should be used to pay down newly acquired debt or accounts that were not discharged during bankruptcy, or to fund an emergency savings account.

Another important issue that deserves one's attention is the difference between want and need. Impulsive spending is the root cause of many financial problems. Once personal bankruptcy has lifted the weight of heavy debt, it is imperative to avoid taking on new debt in the months and years to follow. By evaluating all purchases in the light if whether they are needed or simply wanted, consumers can make wise decisions concerning how their money is spent.

For California residents who are coming out of a successful personal bankruptcy action, these tips can help form the base of a whole new approach to personal finances. With the right blend of knowledge and motivation, it is possible to move forward with a strong financial foundation. After all, improving one's financial outlook is the central point of any bankruptcy action, so taking care to protect that stability should be a priority.

Source: kfvs12.com, "9 things to know about living within your means", Andrew Housser, April 20, 2015

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