People ask me a lot of questions. A very common question is “how can I rebuild my credit after bankruptcy?” Another variation of the question is “how long will it take to rebuild my credit after bankruptcy?” For most of the people who are calling me, I think that is the wrong question. Hidden beneath the “how can I rebuild my credit” question is another question which I am afraid is the real question: “How soon can I get back in debt?”
Once the bankruptcy is completed, most of my clients are really out of debt – or at least nearly out of debt. That can feel pretty strange for somebody who is not used to it. It can feel uncomfortable, just not normal, not OK. There can be a tendency to want to get back into debt as soon as possible, because being debt free is just too strange. Let me suggest this is not the time to be thinking about more credit. This is the time to focus on staying debt free and actually enjoying being debt free. Being debt free will start to feel really good if you allow yourself some time to let it start feeling normal.
The better question would be “where can I learn some money management methods and principles?” I make no claim of being a money management expert. If you want such an expert, I have been recommending Lutheran Social Services and/or Family Means for years. Having said that, however, let me share a few money management ideas that I believe actually work:
- Never let somebody else handle your check book or checking account. Always take care of it yourself. Otherwise you’ll never know what’s going on.
- Minimize automatic withdrawals – they make it harder for a person to be aware of where the money is going.
- Sit down and spend some time with your bills. Touch them, smell them – I’m serious. Accept that they are real and they are yours.
- Pay each bill manually or as manually as technology these days permits. Avoid everything and anything that helps you forget that the bill is there.
- Avoid credit cards whenever possible. In the situations where you must have one, use a debit card or a prepaid card.
- Do whatever it takes to completely rid yourself of the idea that somebody or something is going to come along and bail you out. No matter what the politicians, your friends, your relatives (especially parents) say, there are no free gifts. No free bailouts. No free money of any kind. It all has a price of some kind that you will have to pay sooner or later.
Everything I’ve ever read about money management says you should do a written budget. Personally, I’m not sure that’s such a great idea. Diets don’t work for people who need to lose weight, and I think a budget is a lot like a diet. Best to take it day by day, being mindful every day of where your money is coming from and where it is going to. I don’t think it is at all a matter of needing to put yourself on something like a diet. I think it’s mostly a matter of needing to really just start paying attention.
This article is for general information purposes only and is not intended to be legal advice. Kelly Law Office is a debt relief agency helping people file for relief under the federal bankruptcy code.