It is quite common to find people who have made a wreck of their finances and are hardly able to recover from it. Recovering form bankruptcy and rebuilding credit is not the easiest thing in the world but it is possible. Usually, such people do not even realize how they got to the situation they find themselves in. so they just go on struggling in the same path that got them financially messed up in the first place. It is also important to find a way out of every financial problem as soon as you can because the longer the situations remains, especially when you have no clue as to how you can go around it and get back on your feet, the more critical it may become. That said, let’s look into some vital steps and tips that will help get you out of the financial rut you may have gotten yourself into. They will also help you watch out for traps to get you into financial trouble again. Life after bankruptcy could be challenging and confusing but with the right information and bankruptcy advice, you can definitely make it through.

Accept that you have a problem

It may sound awkward because you will expect people who have issues with their finances to know they have problems, but that is not the same thing as accepting that you have a problem. Some people simply live in denial when faced with financial issues. This keeps them in the bondage much longer than is necessary. The result is, instead of learning how to get out of it, they resolve to live with it as their new normal. But it is not going to be long before such a person realizes that he or she cannot become used to such a situation.

When you accept that you have a problem, you are closer to asking for and accepting help. No one can help a man who will not admit that he has a problem. If you don’t accept that you have a financial problem, you may start getting things complicated by taking loans after bankruptcy. Once you are able to accept that you have a problem, it’s just the first step. There are of course other things you have to do but accepting that you have a problem is the first bankruptcy advice you need.

Be determined and committed to making a difference

Though recovering from bankruptcy or rebuilding credit is a possibility, you have to be determined and committed to make it through. It is going to take making some pretty difficult choices and decisions to recover from financial wreckage, especially if the situation is really bad. Most of them will seem so difficult that if you are not committed and determined, you may just give up along the way and sink deeper into the financial wreck. It may also take longer than you expected to get back on your feet and make progress. You will therefore need determination and commitment to go through all the stages, making all the difficult decisions and sticking to them.

One reason why you may have found yourself in a financial wreck in the first place may be that you have become very familiar with a certain way of going about managing and taking care of your finances. Though it has led you into trouble, it is not going to be very easy to just let go of the ideas you have held on to for so long. Determination to get out of the situation will get you there.

Trace your financial steps back to few years

In oder for you to make things right financially, it is important to figure out how you got to the situation in the first place. This will help you determine more accurately where you made errors and to see more clearly what you must do to make a difference. Once you know what went wrong or what you did wrong, you can avoid the mistakes as you commit yourself to making things right.

Learn financial principles

For the most part, life (especially life after bankruptcy) is about principles and the level to which you adhere to these principles determines how successful you will be in the different areas of life within which they apply. There are financial principles that guarantee financial progress and success. It is very likely that ignorance of those principles is one thing that has gotten you to where you are now. The good news is, these principles can help you recover from the problems ignorance has caused.

– spending within your means. I tell people, if you spend more than you earn, it will be very difficult for you to get out of financial troubles, talk less of making any financial progress. Spending more than you earn is a sign of financial immaturity and it must be handled before you can make a difference in your finances. This goes especially to people whose desires and needs seem to always be above their wages. If you always have to spend more than you get, you will have to live in perpetual debt. Make a decision to never spend more than you earn. Don’t even get to the place where you have to spend all what you earn. Spending is the least important thing to do with your money.

– Start saving a larger proportion of your earning. This will help keep you from taking loans after bankruptcy. If excessive spending got you into the unpleasant financial situation you find yourself in, excessive saving can help you get out of it. The more you save while recovering from bankruptcy, the less time it will take to stand on your feet again. It is an important step towards rebuilding credit. Make it a habit to save as much as you can. Minimize spending and maximize saving. Let the latter be your priority.

– If there is even a slightest possibility of investing in something, Take it. Whenever possible, life after bankruptcy should be geared towards making investments. No matter how small the opportunity may seem, if it seems promising, take it. You will recover from a financial wreck faster if you make investments, no matter how small they may seem.

Do away with bad financial habits like gambling

Some habits are the undoing of most people. Gambling is the worse of them and letting go of it is about the wisest bankruptcy advice you can get. Gamblers are not only terrible at managing money. They are also caught in the idea that the next time may just be when they hit the jackpot, but it never happens. Gambling is a sure way to get yourself into financial troubles. But if you are already in trouble, then its time to do away with the habits that got you into it in the first place.

Also, people who gamble a lot usually get involved in things like alcohol and drug abuse. If you are by any chance caught up in this circle, you need to break away before you can make a difference financially.

Watch your friends

Your friends have a high tendency of influencing your finances. It could be positive or negative. You have to determine how your friends are influencing your finances and what changes you need to make in order to turn things around. Sometimes, excessive drinking, clubbing, gambling and drug abuse are the result of pressure from friends. It may be difficult to cut some of those friends out but it is absolutely necessary to get you out of the rut and into the right track again. The wrong friends could drive you into taking loans after bankruptcy, which will only get you into more trouble.

More so, if you decide to make changes without straightening out the issue of wrong friends, you may just find yourself stuck in the same spot for long. You cannot move on or correct the situation if you still have a lot of weight clinging to you. It will seem two times more difficult rebuilding credit and making progress without letting go of friends who hold you back.

NO more borrowing

When people get into trouble financially, they usually resort to borrowing a lot. However this is the worse bankruptcy advice you should adhere to. Taking loans after bankruptcy is simply a lame thing to do. It further compounds the problem. Borrowing always seems like an easy way out of your financial troubles until it is time for you to pay back. Paying back debt is unnecessary financial weight to carry. If you are already in a bad financial situation, it is going to take a while to be sure you can even pay off any debt once you get into it. The best thing you can do for yourself under such circumstances will be to keep away from borrowing as much as you can. It will only slow down the process of recovery and make it more difficult to recover from.

Set financial goals

Setting a financial goal is a powerful step for people who are recovering from bankruptcy. It makes life after bankruptcy much easier. Now this is where you actually begin to take the steps that will launch you in the right direction. The right financial goals will obviously set you on course in your financial walk. There are basically two sets of goals you have to set. There are long term goals and short term goals you need to put in place and work toward achieving. Financial goals are usually about how you save and invest money. First you must realize that the better your financial plan, the greater your possibilities of getting things straight and recovering from the financial wreck.

Lets start with short term financial goals which are necessary for those rebuilding credit. It will simply include things you look forward to achieving financially in about a few months or so. Short term goals will help you set things in order so that you can achieve long term goals. It could be an amount of debt you want to settle within a specific period of time or some amount of money you intend to save within the next few months.

Then there are long term goals which could span for more than a couple of years. Once you are diligent in following through with short term goals, it will be easier to meet your long term goals. For the most part long term goals are the fulfillment of multiple short term goals over specific periods of time.

Make a financial plan

If you have goals, you need plans. There are many things you have to do but making a plan is definitely one bankruptcy advice you should take serious. Plans are like the road map that help you to get to your goals. While your goals could be seen as a whole building project, the plan helps you to break it down into little achievable pieces, stating out at each stage how it will be done. Without a financial plan, your goals may seem too high to attain and if you go ahead to attain them without a clear plan, it is very likely you are going to give up along the way. Making a financial plan is another way to keep you away from taking loans after bankruptcy.

Just like your goals can be divided into long and short term goals, your plans can be divided into long and short term plans. That means short term goals should have a plan that helps you bring them to realization and the same thing follows for long term goals.

Let the plans you make be as clear as possible. It should definitely include what you have to do and what you must not do to achieve your goals. Your financial plan could span for just as long as it is going to take to meet your goals so there is really no time specification.

One other things that should be included in your financial plan is the steps you are going to take to pay off every debt you may owe. As much as you can, make sure you pay off your debts. Let the plan to repay every dime you owe be clearly stated out in your financial plan so that it is not a difficult decision to make when the time comes. Some times people accumulate debts and hurt themselves financially, not because they do not have the money to pay back but because they feel like paying back is not suppose to be the priority at any time. If such a person is into gambling, he or she will prefer to gamble more and stretch their chances of winning than use the money they have to pay off some debt they have had for some time now even though its hurting their finances. Like we earlier stated, it is difficult to move on if you are carrying the weight of debts. The best thing you can do is pay off over single dime, no matter how difficult it may seem at the moment

Use a financial budget

Keeping a budget is about the only assurance that you are going to follow a financial plan. It is simply having an itemized summary of intended expenditure which is usually coupled withexpected revenue. There are certain things you will have to do in order to use a budget. It is a great way to stay on course with bill payments as you make decisions based on your monthly income and expected expenses.

While coming up with a monthly budget, don’t forget to include unforeseen expenses so that you don’t make serious spending mistakes. If you create a budget without including unforeseen expenses, you may be thrown off balance when you have to make such expenses. Since you did not prepare for them, it is only natural that your decisions concerning such expenses may not be the best at the time.

The amount of money you are going to save from your monthly income must also be carefully considered and decided upon. Remember, it should be an amount you are comfortable with and commit to saving that amount. You could even make arrangements with your bank and the company you work for. If your monthly pay is done through a bank, you could ask the bank to automatically save a particular percentage of your monthly earnings so that you don’t have to worry about making the hard choices or decisions after receiving the money.

One aspect of your financial plan you should take note of is considering your spending habits. It is possible that some of the things you spend a good amount of money on are not really necessary. You should consider the things you buy and see how you can separate the necessary from the unnecessary stuff.

Monitor your credit score

Your credit score is very important, especially if you are going to need any form of financial assistance from a bank. This means from now on you have to make sure your credit score is straight. The first thing to do is pay off any credit card debt you may still be carrying around. Thats just one thing that seriously hurts your credit card score, making it difficult for banks to give you any form of assistance.

It may be an additional cost to monitor your finances but if you can do that by any chance, the benefits will surely outweigh the cost.

One other advantage of monitoring your credit score is that you get to understand what steps to take towards recovering from bankruptcy and when to take the step so that you effectively improve your credit score over time.

If your credit report has erroneous information, you are most likely to find out and make necessary correction by getting connected to a credit monitoring service. Some banks actually offer such services but if you can’t find one or don’t want to use a bank, you can find such service providers on-line.

As you monitor your credit score, don’t hesitate to dispute any inconsistencies or inaccuracies you may notice. Sometimes, the company dealing with your credit report could make mistakes that will really affect your credit score and determine how long you take to recover from it. That’s why you must make conscious efforts to monitor your credit score and credit reports. Make sure you write a letter to your credit bureau pointing out the discrepancies and asking them to to make the necessary corrections.

As you do your best to get back on track financially, make sure you don’t fall prey to people with services that say they could remove some items from your credit report or make some adjustments to it that should work in your favor. Such services or the people behind them are simply trying to take advantage of your financial vulnerability at the moment to make your situation worse.

Be committed to paying your bills on time

Committing to paying your bills on time may not seem like a move that will amount to anything much. However, it is a great way to improve your credit score and recover from the financial crises you find yourself in. As you commit to paying your bills on time, your credit score will improve faster than when you continue paying your bills late.

Apply for and use a secured credit card

A secured credit card operates in an interesting way that helps you stay out of credit card debts. With this type of credit card, you could either leave a deposit with the bank or use your savings account for security. This ensures that whenever you make a purchase but fail to pay using your credit card, you don’t have to keep the debt which will hurt your credit score. The bank will simply make the payment and reclaim the money form the deposit you made or from your savings account. This effectively saves you from the dangers of keeping a credit card debt and makes life after bankruptcy much easier.