Budgeting tips after Chapter 13

The point of Chapter 13 bankruptcy is to give you affordable payments to pay off what you owe. These are due on a monthly basis.

As such, you need to have a budget and stick to it. You do not want to miss those payments. Creating a budget helps you see what “affordable” looks like in your case, and it helps you work your way through until you have completed every single payment.

With that in mind, here are some post-Chapter 13 budgeting tips:

• Married couples should always do a budget together so that both are entirely on the same page.
• Be strict when creating your budget, figuring out exactly what your income looks like and putting every last dollar into a category.
• Remember that some months come with extra costs. Winter in New York can lead to higher heating bills, for instance, or September can mean you must buy school supplies for your kids.
• Begin with necessities. This means starting with things like the mortgage and groceries.
• Update your budget for every single change. Whether you drop down from two incomes to one or get a raise at work that increases your earnings by 10 percent, make sure the budget reflects it.
• Stop adding unneeded debt. Never spend money that does not fit in your budget. Account for everything, every month.

If you are considering bankruptcy, perhaps because you did not use a budget before, it is essential to understand exactly how it works. Make sure you know what benefits Chapter 13 has and what to do to get the process started.