Living Right After Bankruptcy: 5 Rules To Help You Make A Budget

It isn't nearly as hard to make a budget as it is to stick to it

. It is all to easy to skip saving, thinking you'll take care of it next paycheck, or spend money on something you don't need and worry about paying it later. However, once that behavior starts, you are on a slippery slope.

So, what are the big rules to follow when you are trying to manage your money the right way? Here are 5 of the most important money management rules that could help you stay on track and out of debt.

1. Think about the future. When are you thinking of spending big money on something, ask yourself what you will think of that purchase in a week. How about a month? A year? 10 years? Impulsive purchase decisions often leave us with buyer's remorseand a big pile of debt to go with it.

2. Don't spend too much of your income on your home and its expenses. Buying a house that you can't really afford is setting yourself up for failure. Your mortgage, taxes, insurance, and other home expenses should only add up to 29% or less of your gross monthly income.

3. Don't make your car payment a burden. Your car payment should be 15% or less of your net monthly income.

4. Keep an emergency fund. You should have at least 3 months worth of living expenses in a savings account. To be really safe, you could have 6 months of living expenses saved. With this rocky economic climate, it is better to be safe than sorry.

5. Don't forget fun. It is important to have a little extra money in your budget for entertainment or leisure. Going to see a movie, taking a trip to the amusement park, or doing a little shopping can be a great way to keep your family healthy and happy. On that note, if you are choosing between an experience or buying something material, go with the former. Research has shown that it makes us happier.

You don't have to follow all these tips perfectly, but they are important to keep in mind. You can't decide whether you've done a good job making and following your budget if you don't know where you are supposed to be. After bankruptcy, it is essential that you make a sincere effort to stay out of debt. Your St. Louis bankruptcy lawyer is more than willing to help protect you from debt but that doesn't mean he or she wants to see you back in the office with the same problem mere months later.

by: Jim Brown

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