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5 Ways to Put Your Life Back on Track after Bankruptcy

5 Ways to Put Your Life Back on Track after Bankruptcy

Filing for bankruptcy can be stressful. It is a pretty common thing but that does not make it easy. Bankruptcy can often lead to feelings of anxiety, shame and often hopelessness. But it is not difficult to recover from bankruptcy.

It does not have to be a disaster for your financial situation. Bankruptcy can be an excellent opportunity to start a new life.

Recovering from bankruptcy is a gradual process. It has a negative effect on the credit score and to improve it, time and patience are required as many people just become impatient with the lengthy recovery process.

Here are some of the tips that can help in successful recovery after bankruptcy:

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1. Highlighting and addressing the causes

The first step to recovering from bankruptcy is to understand where things went wrong in the first place. Finding out the problem and addressing it is the key to recovery. You cannot come up with a recovery plan unless you know what went wrong in the first place.

When knowing the problem, you can come up with a new strategy. You can set a different budget or look for a new employment to make sure you do not end up in a same financial mess as before.

You can also take useful advice from a bankruptcy advisor so that you can handle the situation in a better way.

2. Know your goals

The recovery process can be successful only if you have a proper plan and for a plan, you need to know what you are aiming for. You must decide whether you need to have a healthy credit score or you need to clear all the debts.

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Having goals is helpful in focusing on the right area of success. It will also make it easier to focus on one thing at a time as you can pick a few goals and work towards them.

3. Do not ignore credit score

Knowing the credit score after bankruptcy can be painful because it is not going to be good. People often try to put it off for as long as possible.

But knowing the credit score is important. It will help in knowing about the debts and any inaccuracies.

4. Benefits of a new bank account

If you want to show financial stability then opening a new bank account is a good idea. Opening a new account is useful in practicing good financial habits which can result in saving money.

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While opening the account, you should talk to the banker and make sure that you sign up for an automatic online bill payment. For recovering from the financial situation, you need to pay the bills on time.

Not delaying the bills is an excellent way of improving the credit.

5. Getting a new secured credit card

Credit card bills can be among the things that lead you to bankruptcy so you may be hesitant to get a new one when you are planning to recover from your financial situation. You may feel like getting a credit card is not the best decision.

But getting a secured credit card is an effective way of improving your credit score. Find the right credit card and check the rates.

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Compare rates so that you can choose the card that offers the best rates. It is also important to be careful because bankruptcy filers can be a target of predatory lenders. Do not fall prey to high-interest rates.

You can easily survive a bankruptcy if you stay vigilant and patient. You should always regularly check your credit score to remain aware of your true financial situation.

Getting out of the bankruptcy slump takes time, but playing an active role will help in getting you on the right track and bounce back from bankruptcy.

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Adnan Manzoor

Data Analyst & Life Coach

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Published on June 12, 2018

How Much Money Do I Need to Retire? Find Your Answer Here

How Much Money Do I Need to Retire? Find Your Answer Here

It is never too early nor is it ever too late to start planning for retirement. It ultimately depends on your way of life, where are you living, and whether you need to let go of anything. A successful retirement strategy is to have enough pay to cover your expenses with a little cash going into a savings account for sudden financial needs.

With regards to retirement, we all have an alternate vision in mind. In fact, some think about traveling throughout the world, while some think of a peaceful life with their grandchildren. Whether we get ready for it or not, we will one day turn to retirement age and so, we should be prepared for it. I’m going to tell you how in this article.

Benefits of early ventures for retirement

The way this works is you figure out where you need to live, the amount it will cost you to live there (rent/food/transportation), and the various expenses you will need to account for, like travel/insurance/medical bills and taxes. Many people are struggling to put aside money for their future savings and some haven’t started yet. Think you can put off thinking about retirement? The reality is that you need to start thinking about it right now, and putting aside some money from today.

There are a lot of benefits of taking early steps towards retirement. Utilize the power of compounding, low investment for targeted corpus and you can create more corpus investing the same money:

  • If someone saves $100 every month and starts investing for 30 years at 10% return, initially you will see that within 5-10 years, your investments will not multiply. However, after that period, the corpus will increase immensely with the impact of compounding. The investment period expands the extent of profits increments in the corpus.
  • Suppose there are two people, one aged 30, and the other 40. Both need to resign at 60 with the same retirement objectives of $300,000 USD each. Both will put resources into an investment with 10% of the return. Thus, to accomplish their retirement objective, the younger one needs to save $100 USD / month and the older one needs to collect $300 USD / month. Since the older one has started investing ten years later than the younger one, he will pay more than double what the younger one will pay.
  • If someone saves $100 USD every month and starts investing at 30 years old till 60 and gets 10% annual return, his corpus becomes around $170,000. Otherwise, if he starts the same amount spending at 40 years of age with the same 10% return, he will have around $57,000 USD. He can profit by just investing ten years early.

You can’t invest too much money in retirement during the early stage of your career since you may have different objectives. However, you can increase the investment gradually if you start investing just a small amount.

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Average retirement age

For many people who are nearing retirement age or recently resigned, one of their most significant financial regrets is that they did not focus on saving for their golden years. As per the Consumer Reports study, it demonstrates that only 28% of investors with the age of 55 years or older are pleased with the way they have saved for retirement.

As per the report, The Economic Policy Institute breaks down how much Americans have put away.[1] Since you know that when the majority of people retire, you can subtract your age from that more significant number and check down what number of more years you need to work.

But many retirees go back to work. Some of them do part time job while others do seek for a second career. Some even come back to full-time work and then retire again in a couple of years. So deciding their retirement age could be tricky.

Average retirement savings

To get retirement started, saving is pretty easy, though it can seem complicated. These simple five steps will make you go on retirement now. So, you don’t need to stress over having the same regrets as today’s retirees.

1. Invest 15% for your retirement

Your initial step is to save 15% of your income. This will depend on your gross income and does not include any coordinating assets you get through your employer’s retirement plan.

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It’s sufficient to enable you to achieve your retirement investment funds objectives, but not too much to keep you from enjoying your income today.

2. Utilize tax-advantaged retirement plan

Yes, we utilized the T-word; however, don’t daydream! Split your 15% retirement contributing budget between charge conceded retirement plans like your 401(k) or after-tax plans like a Roth IRA.

3. Invest your money around

To put it all in one place is the most significant risk that you can take with your retirement money. With mutual funds, however, you can invest in the biggest and most recognizable brands as well as that new organizations you’ve never known about but has a lot of growth potential.

Opt a growth-stock mutual fund with background marked by solid returns for both your 401(k) and Roth IRA speculations.

4. Stay with it

Since mutual fund investing is less risky than investing in single stocks, it is not risk-free. You can see your savings grow in the long term as long as you can leave your money where it is and keep adding to it.

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5. Work with an investing professional

It is essential to look for an investment professional, as you must have a lot of queries concerning your retirement plan during 30 or more years of investing,

Never make due with an investment professional who recommends or patronizes you to turn over all your investment choices to them. Since this is your retirement, nobody will think or care about it more than you do!

You might analyze or compare your savings against the average retirement savings for your age group to check whether you’re falling behind or getting towards of the curve. On the other hand, it might be conceivable to hang up the work boots and hit the shoreline with fewer savings if you live easily or below your means.

How to achieve your financial goals?

An ideal approach to achieve your financial goals is to stay focused on what you need for your future, ignore everything (and everyone) else that may divert you. There’s a significant business culture out there that requires you to stay in debt, live for the occasion and stress over your future later on.

You need to start planning for your future from now, not when you have more time or money to invest. You can even talk to a financial advisor for any help. Cooperate to set your money goals and make an action plan to reach them. You can retire younger than you thought you could if you create a project and follow up on it.

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Start planning for your retirement

A lot has changed in the last 30 years; our previous generation had an career goal and they would join either a large private company or a government organization immediately after school or college. Then they would spend the next 38 years in the same organization and the form of provident fund and gratuity. They would retire with a decent corpus and they would later spend the remaining time with their pension benefits. It’s a bit different now, but with the above information, you’ll be well prepared.

Whether you can afford to retire now or not, you need not bother with a retirement calculator to get a rough estimate. You should have the capacity to closely approximate your daily spending habits to figure out how much money goes out the door every year.

Featured photo credit: Pexels via pexels.com

Reference

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