The days are finally getting longer and we all know what that means―Spring Cleaning! While you’re washing windows, scrubbing floors, and wondering what that fuzzy, brown blob in the back of your fridge used to be, consider taking the time to clean up your finances.
Before you begin, it’s important to do a thorough assessment in order to determine your next step.
Understanding where you want to be financially will help to figure out how to get there. Do you want to buy a house? Retire at 65? Help your child with college expenses? Set some short-term goals as well as long-term ones to keep you motivated.
Calculate your income so you know how much you have to work with each month. Use only your take-home pay after taxes because this is what you use to pay for your bills and necessities.
Determine how much debt you have and make sure to include everything like your mortgage and student loans, not just outstanding credit card debt.
How much do you have in savings? When coming up with a plan to tackle your debt, you should be putting money into savings as an emergency fund. That way, if you have an unexpected home repair or your car breaks down, you won’t have to rely on credit cards to pay for it.
Your net worth is calculated by subtracting all of your liabilities from all of your assets. Your assets are things like your home, vehicles, money in savings, and investments and your liabilities include things like your mortgage, student loans, credit card debt, and any other loans that you may have.
Do you have a budget that you’ve been sticking to? A comprehensive budget will help you see areas where you may be overspending or wasting money on things you don’t really need. Track your spending for a month and be sure to include every penny that you spend. After the month is over, it should be obvious when looking at your spending where you can make changes that will help your financial future.
Evaluating what you have coming in and what you have going out each month will show you ways that you can make changes and get your finances on track. Are you spending more each month than you have coming in? If so, will a budget help you change that? How long will it take you to pay off all of your debt without taking on any more?
For some, a few tweaks in their budget and spending habits will put them on track, but for many, their financial situation is not sustainable and unless steps are taken, they will only fall further into debt. Bankruptcy may be the answer.
Bankruptcy isn’t for everyone but if you’re deeply in debt, it may be the right solution to get your finances under control. Whether you’re eligible for Chapter 7 in which your assets are sold to pay your debts or Chapter 11 where you are put on a payment plan to pay your creditors, bankruptcy can give you a fresh start.
At Miller, Hollander & Jeda, we’ve been helping people get a fresh start with their finances in Naples, FL for 35 years. Our lawyers are dedicated to the best interest in each of our clients and will walk you through the process, determine whether or not bankruptcy is the right solution for your financial situation, and represent you throughout your entire case. We believe everyone deserves a second chance.
If you’ve taken steps to clean up your finances and you think you may be in over your head with debt, call Miller, Hollander & Jeda today at (239)775-2000. Our Naples, FL bankruptcy attorneys can help you clean your finances once and for all.