Everybody dreads the possibility of a bankruptcy and how it can affect their future. Bankruptcy can happen to anybody at any time. A bad decision, a series of decisions, or another unfortunate event can lead to bankruptcy, but it doesn’t have to ruin you forever. Below are 10 quick tips for your fresh financial start.
1. Make a Budget
The most important part of beginning your financial future after a bankruptcy is to improve on your budgeting skills. You only have so much money coming in, so it’s important that every month you make a budget that accounts for all of your money going out and stick to it!
2. Use Cash
Once you have started on your recovery from bankruptcy, you need to stick to using cash as much as possible. Using plastic is a habit that often results in using up more money than you have and racking up big debts through interest fees.
3. Watch Your Credit Report
Your credit report helps companies determine whether you are worth the risk when you sign for a loan or credit of some sort. Keep an eye on your credit report as you recover from a bankruptcy and ensure it is always accurate, because no one else will.
4. Pay Utilities on Time
Being late for utility payments gets reported on your credit rating, so avoid being late on your utility payments while rebuilding your credit rating.
5. Avoid Financing a Car
Interest rates on car leases are extremely high in many cases, especially when they advertise that “all applications are approved”. Save your money and pay in cash when you are able.
6. Consider RRSPs & TFSAs
To better prove your financial responsibility, it’s best after a bankruptcy to start putting some of your savings into RRSPs and TFSAs. Not only does it prove that you are being more financially responsible, but the tax refunds from RRSPs can also be put towards further savings.
7. Get a Secured Credit Card
A great way to start rebuilding your credit rating is with a secured credit card. These credit cards require you to put down a security payment, which becomes your credit limit.
8. Avoid Scams
Scams are common these days. If you are offered an amazing deal that seems too good to be true, it most likely is. Use the internet to verify any potential scams before you agree to anything or consult a financial advisor for advice. Credit repair companies are common scams and just lead to you losing more money.
9. Educate Yourself
Ask questions when it comes to bankruptcy. During the whole process you can ask questions, then afterwards meet with a financial advisor for guidance. Don’t be afraid to ask your advisor questions either. Also, don’t be too embarrassed to share your situation with family and friends.
10. Know Your Borrowing Limit
If you have loans or credit anywhere, always be aware of your limit and how it affects your budget, especially regarding your budget. Never borrow more than you can pay back.
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