Budgeting After Bankruptcy: Step #4 – Review Your Budget Regularly

Step #1: Determine Your Average Monthly Income
Step #2: Know Your Expenses
Step #3: Create a Balanced Budget
Step #4: Review Your Budget Regularly
Step #5: Use a Technology to Help You

Step #4: Review Your Budget Regularly
The first three steps in this series are really the “meat and potatoes” of creating a budget after filing bankruptcy. This next step discusses techniques that can be used to ensure that you stick to your budget and the financial freedom you have worked for.

Once your budget is completed it is critical that you regularly review your budget. Contrary to what many people think – your budget should not be set in stone. Instead, your budget is a malleable and ever changing guide. It is important to change your budget as it becomes necessary.

Your budget will largely mirror your life events and goals. If you have children who are preparing for college then you may find it necessary to set aside a little money each month for college savings. Similarly, you may have a car that is 15 years old and you know that you need to be saving for a new car. Your budget will need to reflect your goals and priorities.

It is also important to review your budget regularly because in doing so you may be able to catch “cash leaks” or other areas of the budget that are understated. Catching these pitfalls of your budget early will allow you to adjust your budget and will greatly increase your chances for success.

During the bankruptcy process we will speak with many of our clients about budgeting post bankruptcy. There are areas within your bankruptcy, such as Schedules I and J, which may help you draft your own budget. I typically encourage my clients to take their budget and put it on their refrigerator or next to their computer. Your budget should be strategically located in a place where you will look at it often so you can measure your success or be aware of potential stumbling blocks. Again, this really comes back to that “financial honesty” that we discussed in prior posts.

Reviewing your budget regularly will allow you to maximize your chances of success and, just as important, increase your surplus at the end of each month.