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Setting financial goals after a bankruptcy

On Behalf of | Jul 28, 2020 | Bankruptcy

Each year, thousands of Americans turn to bankruptcy to help them get out from under overwhelming debt and a perilous financial future. Whether choosing Chapter 7 or Chapter 13, these individuals can work to eliminate a significant portion of their unsecured debt. It is also wise to set strong financial goals for yourself and your family to avoid facing similar difficulties in the future.

While everyone faces different circumstances, there are generally five tips people should remember when setting financial goals.

  1. Wants versus needs: Make sure your goals and planning clearly recognize the crucial difference between necessary expenditures and discretionary spending.
  2. Long-term versus short-term: Goals will likely be divided by the duration needed in attaining success. A short-term goal might be to purchase a new washing machine while a long-term goal could be saving for a child’s college education.
  3. SMART goals: Used in many professional settings, the mantra of SMART goals can be applied to finances. Goals should be Specific, Measurable, Achievable, Relevant and Timely.
  4. Create a realistic budget: In what is generally considered the culmination of the first three tips, the fourth tip relates to a realistic budget. With wants versus needs laid out as well as realistic, long-term goals, it is easier to decide what money is spent and what money is saved.
  5. Monitor your progress: By monitoring and adjusting your budget and goals, you can pay careful attention to your financial progress. Additionally, it might be wise to review regular credit reports to ensure nothing untoward is happening.

By setting goals and following them, you have a much better chance to build financial success. Every situation is unique, and it is wise to discuss your options with an experienced bankruptcy attorney before deciding how to prepare for your future.

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