How to Save Money Before (and Even During) a Bankruptcy

16 Jul How to Save Money Before (and Even During) a Bankruptcy

Saving money–especially when you don’t have a lot–is always difficult.

Most of my bankruptcy clients think that there’s no way they can save any money. But there are a number of ways to do it that are pretty painless and can pile up the cash quickly.

Here are some ideas to help you start saving money before the bankruptcy process is over.

Start a “Loose Change Savings Account”

Thar’s gold in them thar…seat cushions? Pockets? Washing machine?

It’s amazing how much change we get. Buy a cup of coffee, or a sandwich, or anything that we pay cash for, and we’re likely to get back change.

While individually of small value, those pennies (and nickels and dimes and quarters) can add up.What do you do with it now? You may keep change to use the next day, or it may end up just “disappearing”. Instead of letting your change go to waste, keep a jar or container wherever you empty your pockets when you get home from work, and toss the change in it.

When the jar is full, count it out, roll it, and deposit it into a no-fee savings account at your bank. (Do not use CoinStar or other machines that charge a fee for counting it.) You’ll be surprised how much money you can save–the total is anything but spare change.

Get a Reward for Cleaning

Don’t think that you have anything, but your house is still a mess?

Remember the old adage: “One man’s trash is another man’s treasure.” Go through your “stuff” and look at what you haven’t used for a while and don’t really need any more.

The suit or dress you no longer fit into or haven’t worn for years? The bread maker that you used to love but haven’t baked anything in since 2000? Tools, ladders, clothing, homewares, all can make you money. Set up a yard sale, post an ad to Craigslist, or start a bidding war on eBay. Not only will you be putting money in the bank, your garage and home will be far less cluttered.

Track Your Money to the Penny

I had a client several years ago whose budget showed that she had “excess income,” that is, income over expenses, of $185.00 per month. We went over the numbers again and again, and she couldn’t figure out where the “missing” money was. So I asked her to get a small spiral pad to put in her purse in which she would write down every penny she spent. Literally. Every single penny.

Three days later, I got a call from her. “I found it! I found it!”

Every morning, 7 days a week, she stopped at Starbucks to buy a latte and a scone for breakfast. With tax, it was $6.10 a day, $42.70 a week and $185.00 a month. As with collecting loose change, individually, a coffee and a scone don’t cost a lot. But when you total the amounts that you spend over time, it adds up quickly.

Track your money–you may be surprised at how much you spend on little things that collectively over time turn into a big thing.

Watch Your Splurges

Finding unnecessary spending in your life can really save big dollars. In the case of the “Starbucks lady,” it amounted to $2,220 a year, just for coffee and scones. Put that money to a better use.

Stop your daily Starbuck’s visits, don’t pay for the smart phone apps — and whenever you’re tempted, put those few bucks into your savings jar instead. You might be stuck with Candy Crush Saga a bit longer, but it’s a small price to pay for the savings and the peace of mind.

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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