Bankruptcy is not anybody’s favorite word. The word gives us a message of a hard time for the person who is bankrupt. But how can we prevent the bad time?
The following article is about the techniques that you can follow to prevent bankruptcy.
Estimate the total amount of your expense
Make a list that includes your expenses and by doing so you will have an idea about the areas that you should have control for the expenses. The expenses may include rent or mortgage, utilities, food, healthcare, insurance, transportation, child care expenses and minimum debt payments.
Add up your monthly income
Whatever income you have should be considered and taken into account. The incomes can be your wages, salary, or tips, bonuses, and commissions, retirement benefits, disability benefits, child support payments or alimony payments.
Cut the unnecessary expenses
The goal is to free up as much money as possible to pay off your debt. Of course, you can’t lower fixed expenses, such as your rent payment, car payment, or health insurance premiums. However, anything that isn’t a necessity should be cut and redirected to debt repayment.
The things that you can cut from your expenses may include; vacation, visits to the spa, high-speed Internet (unless you work from home), gym memberships, subscriptions to magazines or Netflix, alcohol, and cigarettes, your landline phone (if you have a cell phone), cable television.
Seek help from a professional
If you are not sure about the plan that you have you can get help from professionals.
Print your budget plan
After you made your plan then print it so that you actually have a written plan to follow. Have a copy in case of loss.
Think of earning more money
You not only should cut the extra expenses from another side you should think about how to earn more money. What are the ways that you can use to add to your expenses?
Sometimes we don’t know how much there is in our homes that we don’t need. Try to find those things that you don’t need and are valuable and by selling them you can have some saving even as little as a dime.
Pay with cash
In order to have control over your expenses, it is easier to pay by cash. So, when you go shopping try to have some money in your pocket.
By following the above steps you can prevent bankruptcy and be safe.