Financial troubles are common these days. In a recent survey it was found that 76 percent of Americans live paycheck to paycheck, according to CNN. Fifty percent have less than a three-month cushion to live on in case of an emergency, while 27 percent have no savings at all. This presents a huge risk if a medical emergency pops up, a job is lost, or even if a family has an additional child. You can avoid bankruptcy with strategic savings and strict budgeting. If you need financial advice of any kind or are considering filing bankruptcy, contact an experienced attorney today.
Make a Budget and Stick to It
Find out what costs your basic needs require and do not spend over that amount. To do this, factor in the cost of your house, condo, or apartment. This should include your mortgage, HOA fees, rent, and/or property insurance. Make sure to account for utilities such as heating, water, etc. Decide how much you can reasonably spend on food every month and stick to that without eating out. Budget your transportation fees as well. The average American family spends 19 percent of their income on transportation (i.e. cars), according to the Federal Highway Administration. Cars, trucks, SUVs, and other larger motor vehicles are expensive; so too are the costs of their upkeep, fuel, and insurance. Consider opting for public transportation, a bike, walking, or even a motorcycle or scooter. When planning a budget, not all of your income should be used every month, as described below in more detail.
Take Out Part of Each Paycheck for Savings
In order to complete your budgeting, you have to account for three types of savings. The first and most important thing to save for is retirement. Roughly 10 to 15 percent of every paycheck should be put into long-term savings for retirement. The second savings you should consider is for emergencies, such as loss of employment. Go back up to the budgeting step and take out all luxuries such as cable, internet, and coffee. Find the number that would be the bare minimum for your family to survive on and save 25 to 50 percent of that each month. By doing this you can build some security within the short-term future. If you are able to make this happen, within a year of saving you should have enough to live on for three to six months in the event that you lose your job. The last thing that you should be saving for is for unexpected events or planned “treats,” such as vacations, home repair, car repair, weddings, new clothing, electronics, or sports equipment. To save for these items, decide how much they will likely cost and how long you want to save for them, and take the appropriate amount out of each paycheck for them, after you have taken out retirement and emergency funds. In order to save for these things without going into serious debt or getting a new credit card, you will have to make budget changes elsewhere.
Georgia Bankruptcy Lawyer
If budgeting fails and you are unable to climb out of crippling debt, it may be time to contact an attorney. Bankruptcy may be the best option for individuals or families that can no longer continue with their struggle with debt. The first and most important is to budget and save for the future. If you have already taken the following steps to a degree and have had no success, contact an experienced Georgia bankruptcy attorney at the Law Offices of Roger Ghai, P.C. today to discuss your options.