Simple Solutions To Financial Freedom

Life After Bankruptcy: Let Go of Guilt and Look Forward to a Better Future

| Dec 28, 2016 | Bankruptcy, Budgets |

In our last blog, we showed you how you can create a realistic budget and stick to it. In this blog we explore the issue of guilt.

One of the biggest questions that people have after undergoing bankruptcy is, “What will my life look like now?” In most cases, our clients feel relief. Many of them did not realize how oppressive their financial problems were until they were able to get rid of them. For the first time in many years they are able to focus on the future.

What will the future hold for you? Whether you want to keep your home and continue paying it off or want to begin building your credit through prepaid credit cards, you can take control of the future.  Here are a few ways that you can get started toward creating a better future for yourself:

Set Up a Savings Plan – As you work with your budget, create a solid savings plan for yourself. Make sure to pay yourself first and set aside any amount of money for emergencies, even if it’s only a few dollars per pay period. A little can add up to a lot fairly quickly. Ideally, you will want to have saved at least six months worth of living expenses in your savings plan. If you can, arrange for a set amount of money to be transferred automatically to your savings each pay period. This makes saving incredibly convenient.

Contribute to a Retirement Plan – Do you already have a 401(k) plan? If so, try contributing as much money as possible to help it grow. We suggest contributing at least as much as your employer matches, but if you can max out your contributions, it would be more advantageous for you. Just like a savings plan, even small contributions add up over time, so don’t be discouraged if you can’t max out your contributions.

Consider Opening a Roth IRA – If you don’t have an employer-based retirement plan or if you simply want another way to save more money, a no-fee or low-fee traditional Roth IRA could be the way to go. Just as you would with your other accounts, make regular contributions to help bolster your retirement savings.  You will be able to accumulate a fund that you can rely upon in your retirement years.

You Can Still Pay Your Creditors – It Is Up to You – What bankruptcy does is put you in control of your income.  You can decide when, if, who, and how much you pay your creditors after you file.  While most of our clients elect to move on and concentrate on the future, we have had clients that set aside a portion of their income which they use to pay back their creditors.  If you believe that that is necessary for your own peace of mind, then you may do it.  It is up to you.  If you do, you won’t be the first, or the last to do so.

We congratulate you for making it this far in your financial journey. Remember, bankruptcy isn’t the end – often, it’s the beginning of a new, stronger life that you can build for yourself with the help of these tips. If you have any questions, please feel free to call The Bankruptcy Advocates at (618) 549-9800!