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Going bankrupt means you’ve lost if you’re playing Monopoly. In the real world, it means that you’ll have a hard time getting any kind of loan for a few years, and you’ll have a mark on your record for close to a decade. While bankruptcy isn’t as bad as losing a limb, it’s a whole lot worse than keeping your finances on track to start with. Let’s look at some things you can do to avoid bankruptcy.
Chapter 7 bankruptcy basically means you have no more options left. This is when your debts are eating you like fire ants. The first thing you can do to stave this off is to spend within your means. While developing a budget isn’t critical, knowing how much you need to survive each month is. A lot of people find that automating their bills is a valuable step toward becoming financially independent. Tracking expenses is a good idea, making things easier if you’re not a financial genius.
Another thing you can do to keep from going bankrupt is to think a few bills ahead. A lot of people get into trouble because the amount of money in their checking account is struggling to catch up to what they need to spend this week. While this week is important, it’s also important to remember that next week is going to be here soon. Unless you want to end up a paycheck behind, keep the future on your mind and think like the future is right now.
