If you’re worried about the looming threat of bankruptcy, then you’re not alone. Every year, thousands of people have little choice but to make the difficult decision that their financial situation is no longer viable: they need to declare bankruptcy. Filing for bankruptcy means a financial clean slate and that all debts are written off, however, this drastic financial move can leave a shadow over a person’s career, along with the embarrassment of it being on public record and the impact on their credit rating.
Avoiding bankruptcy is preferable, but if you’re already in a precarious financial situation you may be wondering where to turn to next. Here we’ll look at how you can avoid filing for bankruptcy and gain better control over your finances.
Before you succumb to this last financial resort, don’t be afraid to reach out and ask for help. You’ll find plenty of bankruptcy advice online, here. You’ll find that the simplest and most practical pieces of advice will certainly help you find a way through this financial minefield. Understanding and recognising that your finances are spiralling out of control is the first step towards fiscal absolution. You may find that a simple change in your spending habits is the key to unlocking your financial freedom once and for all.
Look at your budget
Do you really know how much you’re spending each month? If the answer is no, then highlighting your expenses could help you gain back control of your money and keep most of it in your pocket! All those little online purchases quickly add up, as do those daily visits to the supermarket. Go through your accounts and you’ll soon see a pattern of behaviours that are contributing to your current situation.
It’s at this point you can create a basic budget that covers all your important expenses such as food, rent and your utilities.
Find ways to cut back
If your debts are huge, then cutting back on certain luxuries might not be enough. If this is the case then downsizing entirely could be the answer. This could mean going down to one car and swapping it for a cheap run-around rather than a gas-guzzling SUV. Consider downsizing your home and renting a cheaper property, saying no to your holidays this year and putting the money back into your budget instead.
Every penny counts at this stage so go through your smaller expenses too and see where you can make additional savings. This means cutting back on streaming services, subscriptions, frivolous online purchases, alcohol and eating out.
Focus on your income
If you have a job then consider asking for additional hours, or that pay rise you deserve. Ask your partner to do the same. If possible, consider taking on a second job, at least until you get a stronger hold on your financial situation. Finding other ways to boost your income is also welcome. This could mean selling your car, motorcycle, or even renting that spare room.
If you’re worried about your financial situation then don’t suffer in silence, reach out to a debt expert and discuss your issues as soon as possible.