After Bankruptcy in Canada: Top Five Tips for Saving Money
After experiencing bankruptcy in Canada, one of the most crucial steps you can take towards financial recovery is to build up your savings. While this may seem challenging, especially in the wake of such a financial setback, it is not impossible. Here are the top five tips to guide you on your journey towards saving money after bankruptcy in Canada.
Why Save Money After Bankruptcy?
The importance of saving money post-bankruptcy cannot be overstated. Here are a few compelling reasons:
Emergency Funds: In the immediate aftermath of bankruptcy, you will likely not have access to credit cards or lines of credit. Therefore, having cash savings can be a lifeline during emergencies, such as unexpected car repairs.
Financing Large Purchases: If you plan on making significant purchases, like a car, having a sizable down payment can make the financing process much easier. The more cash you have, the more purchasing power you have.
Peace of Mind: Finally, knowing that you have a safety net in the form of cash savings can give you peace of mind and alleviate financial stress.
Top Five Tips for Saving Money After Bankruptcy
Here are the top five strategies that can help you start saving money after bankruptcy in Canada:
Develop a Financial Plan: The first step towards saving is to create a financial plan. This could involve making a household budget or simply tracking your regular expenses. From this, you can determine a realistic savings goal. For instance, if you were making payments of $200 per month to your bankruptcy trustee, you could aim to save the same amount each month.
Safeguard Your Savings: Once you have set your savings target, ensure that your money is stored in a place where it would not be easy to access. This could be a savings account at your bank or a Tax Free Savings Account. Avoid linking your savings account to your debit card to reduce the temptation of making impulse purchases.
Automate Your Savings: To further solidify your savings plan, consider setting up automatic transfers from your main account to your savings account. For instance, if you aim to save $200 per month and you get paid bi-weekly, you could set up an automatic transfer of $100 every payday.
Align Financial Goals with Your Partner: If you and your partner are not on the same page regarding financial goals, it could hamper your savings plan. Discuss your financial goals and agree on a savings plan. This could involve saving for a car, a house, your children’s education, or retirement.
Reward Your Efforts: Saving money should not feel like a chore; it should be rewarding. Setting short term and long term savings goals can make the process more enjoyable. For instance, a short term goal could be saving for a special dinner to celebrate an anniversary.
In conclusion, saving money after bankruptcy in Canada may seem daunting, but with the right strategies, it is achievable. By developing a financial plan, safeguarding your savings, automating your savings, aligning your financial goals with your partner, and rewarding your efforts, you can successfully rebuild your financial health after bankruptcy. Remember, the journey towards financial recovery is a marathon, not a sprint. Take it one step at a time, and before long, you will see your savings grow.
