Declaring bankruptcy after facing daunting medical bills, divorce, job loss, and other significant setbacks can be difficult. Many people feel a sense of shame when going bankrupt, but I’m here to tell you, that does not need to be the case. Here are some tips, both financially and personally, on how to move forward after declaring bankruptcy:

Needs vs. Wants

Establishing your personal needs from the wants can be a powerful tool when undergoing financial stress. Think about what items you cannot live without, such as food, a home, and transportation. Now think about things you want, but don’t need. These things may include a coffee from Starbucks every morning, new clothes, or a gym membership. By separating your needs from your wants, you will be able to responsibly spend your money where you most need it. Make your coffee at home, be thrifty and give your existing clothes a makeover; cancel your gym membership and go for a run outside!

Make a Budget

Plan, plan, plan, and make a budget! Sometimes people are so overwhelmed that they don’t know where their money is going each month. Start out the month by organizing your funds. Know what your income is and know your set expenses. Create categories based on your needs (not your wants). These may include groceries, transportation, utilities, rent/mortgage, and medical expenses. Then divide your money amongst the categories accordingly. This holds you accountable to stay within the designated range that you have put aside for that particular category. Remember, just because you have a budget doesn’t mean you can’t set aside money when available for some fun things you and your family enjoy! Just budget those things in and stick to your categories.

Rainy Day Fund

Having a rainy day fund will keep you feeling secure about those unexpected expenses and it will help you from gravitating back toward using credit. I suggest that you put aside a percentage of your paycheck towards this fund. Create a list as a family of instances that would justify using money out of the fund and stick to it. Appropriate instances may include job loss, injury, car maintenance and home repairs. It will be tempting to dig into your rainy day account when it’s unnecessary, but don’t do it! You’ll be happy when those times come (as they always do) when you unexpectedly need some extra money.

Don’t Look Back

Once you declare bankruptcy, move on both financially and mentally. Think positively and look at it as an opportunity to start over. Dwelling on the past will only bring stress and guilt. Basically, the best is yet to come!