When credit card bills are piling up and car payments feel impossible, creating a budget is often the first step people take to get their finances back on track. If done correctly, a budget can do wonders, helping you save for your first home or even retirement.

If you’ve filed for bankruptcy, budgeting is especially important. As a bankruptcy lawyer Memphis TN has counted on, I have seen this simple process change lives. Bankruptcy is the light at the end of a tunnel, offering a fresh start when you need it most. But if you continue to spend above your means after filing, rather than taking necessary steps to prioritize and focus your finances, you’ll end up right where you were before.

Avoid these common budgeting mistakes to experience the freedom bankruptcy has to offer.

1. Ignoring past mistakes

Above all, your goal with a budget is to have a positive amount at the end of each month. If you have a negative amount, you are probably living above your means through the use of credit. But remember, that may have been what got you into debt — and what led you to file for bankruptcy — in the first place.

Debt is overwhelming. Problems escalate quickly, so much that it’s hard to pinpoint everything that went wrong. But I tell clients making a budget in their post-bankruptcy lives to reflect on previous spending habits. If you’re aware of when and how you started falling behind, you can ensure that it never happens again.

2. Forgetting the unexpected

Many people associate debt with reckless spending, but the truth is, it can happen to any of us through no fault of our own. One medical emergency could be all it takes.

If you’ve budgeted your entire income without leaving any room for unanticipated expenses, you still have to pay for those expenses. You might find yourself turning to credit cards or loans, which, again, can lead you right back where you were.

The bottom line: expect the unexpected.

3. Overlooking the small stuff

It’s easy to remember our big monthly expenses, but what’s the harm in a cup of coffee here and there?

Small purchases add up. Track every penny you spend. You may just find yourself surprised at what you’re spending when you look at all the little things.

4. Spontaneous spending

Speaking of those tiny purchases, were they in your budget? No matter what your budget looks like, it won’t help you unless you stick to it. If it doesn’t include a category for impromptu expenses, it likely doesn’t account for spontaneous purchases.

Sometimes budgeting — and rebuilding after bankruptcy more broadly — requires saying no. To the things you want to be doing. To what your friends are doing. To what simply isn’t within your means. But those sacrifices won’t feel so bad when you have saved for the expenses that truly matter to you, and you finally have the life you’ve wanted.

Talk to a Bankruptcy Lawyer Memphis TN Trusts

As a bankruptcy lawyer Memphis TN has turned to for more than 30 years, I have seen this simple process change lives.

If your finances have gotten off track, maybe you’re ready to take the next step and explore bankruptcy. It can feel overwhelming, but our lawyers are here to put your mind at ease. We’ll answer every question and make the process easier than you can imagine.

Our lawyers would love to help you. Contact us online or call us at (901) 327-2100.