We’ve written a series of blog posts answering common questions regarding budgeting and bankruptcy and how it impacts your finances. Call (262) 827-0375

Small Expenses That Have a Big Impact

It would be an understatement to say that there are many approaches to managing money. In fact, it seems that no two people manage money exactly the same way. Some people live fugally out of necessity, and some live frugally by choice. Others work hard at saving. And still, some seem to spend lavishly but never seem to run out of money. If there’s one thing that’s certain, it’s that a one-size-fits-all approach to managing money simply isn’t effective – everyone’s situation and everyone’s priorities are different.

But there is one phenomenon when it comes to money that we think is probably more common than not. Though it takes many different forms, most people in Milwaukee, southern Wisconsin, and America in general would probably admit they struggle with those little expenses that seem insignificant at the time but slowly add up to cost quite a bit of money. The biggest problem with these sneaky expenses is that most of us probably don’t think about them very often and before we know it, the money is spent.

As with just about everything in life, you can’t fix a problem if you don’t identify it first. And certainly not every one of these little expenditures is a “problem” – we’re not suggesting that. The key is to be aware of where your money is going and, most importantly, realizing that you are spending it. That being said, take a minute to think about your “small expenses” and whether or not they are adding up to make a big financial impact. That $3 cup of coffee a few times a week may seem insignificant, but it’s a big expense over time. Take this as an example:

One financial planner tells the story of a married couple of young, successful professionals. When they came to him for advice, they explained that, even though they were each making six-figure salaries, had no kids, and weren’t living in an extravagant house, they just never seemed to have any extra money around for retirement or savings or any special projects. After taking them through an exercise where he asked them to think about their “typical day,” he realized they were each making three stops per day for premium coffee—before work, during lunch, and after work. When he did some math, he showed them that they were spending almost $20,000 a year on coffee!

While a story that extreme probably isn’t very common, the phenomenon is all too common. Many of us probably couldn’t spend $20,000 a year on coffee and not notice it, but we probably could do without an extra trip to the vending machine each day, one fewer pair of shoes each month, or packing a lunch from home a couple times a week instead of going out every day. We’d like to encourage you to think if there is anything in your life that you wouldn’t miss terribly, and then calculate how much you spend on it in a week…or a month…or a year. You may be surprised.

Finally, we aren’t suggesting that anyone go without simple joys in life. Sometimes the expense is worth it. We are only suggesting that sometimes money can slip through all of our fingers without any of us ever really noticing it. The key is being in control and acknowledging the small expenses in your life so they don’t add up on you unknowingly. Perhaps the money you save will allow you to take an extra couple days of vacation or buy a car a couple model years newer.

As Milwaukee bankruptcy attorneys, we at Burr Law Office LLC certainly are not suggesting that small lifestyle changes will turn your finances around immediately. Financial planning, which includes considering bankruptcy, requires consideration of many different factors. At Burr Law Office LLC, we’re always ready to help you evaluate your situation and present you with options that you have under the law to protect your own financial well-being, your future, and the future of your family.

If you are facing tough financial decisions, please schedule a consultation with one of our Milwaukee bankruptcy lawyers today and see how we can help you. We are committed to helping good people make the best out of their tough situations, and we are experts at doing it.

Guilt & Bankruptcy

If you were to ask the average American who has never been through the bankruptcy process what he or she thinks about the cause of bankruptcy, I would venture to guess that the responses would vary but have a similar theme: it’s a math problem—there’s not enough money for debts and obligations.

While it’s true that, on the surface, there is a “math” problem involved in most cases on bankruptcy, that kind of response doesn’t really get at the heart of the matter. The reasons individuals file for bankruptcy are as unique as the people filing, and they go much deeper than being just a matter of “math.”

Unfortunately, because of the lack of understanding around the diverse causes of bankruptcy, some people have attached a negative stigma to the entire subject of bankruptcy. This negative stigma can leave people feeling guilty about their bankruptcy or even guilty about learning more about the prospect of bankruptcy.

Today I’d like to take a look at a few common misconceptions regarding bankruptcy and why there is no place for guilt in the bankruptcy process. We’ll first look at why there is usually no reason to feel guilty, but we’ll also discuss why guilt can actually cause more problems than it needs to.

Myth: Bankruptcy is the result of irresponsible spending or poor money management.
Reality: While it wouldn’t be accurate to say that irresponsible spending is never the cause of bankruptcy, it’s simply not very often the case. Many people assume that credit card debt is always irresponsible debt. While, it’s true that credit card debt is a part of many bankruptcy cases, the reasons the debt was incurred are often very legitimate. Perhaps someone lost their job and just used a credit card to “get by” during a period of unemployment. They used the card to buy groceries, gas, or even pay for healthcare expenses. Many people truly believe that their situation is very temporary and will turn around quickly. If it doesn’t, they can find themselves having accumulated quite a bit of debt in a short period of time. When you add the interest charges, late fees, and other penalties that are often associated with credit cards, the debt snowballs and becomes unmanageable.

Myth: Bankruptcy is very uncommon and I must have really screwed up to find myself filing for bankruptcy.
Reality: Simply put, many people just plain don’t like to talk about their personal financial situation—especially if they feel it is less than ideal. If you feel you never hear of anyone else that you know who has filed for bankruptcy, your perception simply does not reflect the reality, and the statistics bear this out. Multiple millions of Americans file for bankruptcy every single year for a whole host of reasons.

Myth: Bankruptcy doesn’t happen to anyone who’s educated or wealthy—only poor and uneducated Americans need to rely on the bankruptcy laws.
Reality: Simply put, the statistics don’t support this assertion either. Poor, wealthy, uneducated, and educated alike all file for bankruptcy. Being wealthy, well-connected, or educated does not have a strong correlation to filing for bankruptcy. You should never consider yourself part of a certain “type” of people that file for bankruptcy. There’s no such thing as a typical “type.”

Finally, there’s one more reason guilt has no place in the bankruptcy process. Oftentimes, because people feel guilty about filing for bankruptcy, they put it off until it’s truly the last resort. In many cases, bankruptcy can be far more effective and beneficial earlier in the process than people realize, but because they feel guilty about it, they don’t seek help and wait until they feel they have no other options. The bankruptcy laws in the U.S. were written to protect you and your future, and when they are applicable, you should take full advantage for the sake of you and your family’s financial future.

If you’re considering filing for bankruptcy, remember that guilt has no place in the process. As stated previously, the causes of bankruptcy are extremely diverse and most times very legitimate. Please also realize that feeling guilty may prevent you from making a solid, objective decision about what’s best for your future.

At Burr Law Office, we specialize in helping people protect their financial future and well-being. If you are feeling guilty or embarrassed about your financial situation, don’t be. We truly understand that everyone has a unique situation, and in everything we do, our one goal is to help you position yourself for your best outcome.

Simplifying Your Budget

It’s not unusual to want to keep a better eye on your spending. Sometimes, sticking to a budget in Milwaukee can be difficult, and setting one can be even worse. The bankruptcy specialists at Burr Law Office LLC are committed to helping you live a financially sound life with a great future, free of debt. Here are a few tips to help you get started making a budget.

Determining the best medium for you

The first step in setting up a budget is figuring out how you’re going to keep track of things. Prefer to do things the old-school, pen and paper way? Great. Have a computer and want to do it digitally? Excellent. Have access to software that can help? Phenomenal. We recommend using a digital tool, as you’ll be less likely to make mistakes when it comes to tracking. Even if it’s just a spreadsheet, keeping track of all spending will help your mind and finances stay organized.

Track anything and everything

While you may not feel it’s necessary to record the $1.25 type purchases you make here and there, those can often be more important than larger purchases. These types of purchases don’t require as much thought and, without realizing it, can quickly add up to a large chunk of money. It’s important to track ALL of your expenses, from your mortgage payment to chewing gum. It’s also crucial to give yourself precise descriptions for purchases so you remember exactly what it was if you need to look back in the future.

Diligence is key

It may seem like a nuisance, but updating your budget daily will take you less time in the long run. If you put it off, you’ll spend more time trying to decipher and remember purchases.

Keep an eye out for more tips coming soon from our experts on how to establish a budget in Milwaukee. Contact Burr Law Office LLC for help getting yourself back on track.

Dealing with Post-Holiday Expenses

Now that all of the holidays are over and the dust has settled, it’s time to start dealing with the bills and expenses that go along with them. For some, this can be quite the chore. Our Milwaukee bankruptcy experts are here to offer you a bit of advice to help ease the pain and get you through the post-holiday stress.

Avoiding it won’t make it go away

Unfortunately, setting your bills aside and ignoring them won’t make them go away. You should open them as soon as you get them and make a plan of action. What is the minimum amount due? In looking at your budget, if not the entire bill, how much in excess of the minimum payment can you afford to pay this month? After determining the amount, pay it.

Adjust your budget

If you find yourself spending unnecessary money, try tightening up your budget. Things like buying a $3+ cup of coffee every morning or going out to lunch every day during work can add up. Though it takes extra time, making these things at home will help save you a ton of money.

Take inventory of your home

Look around at the things in your home that you aren’t using – furniture, clothes, etc. Do you have things you aren’t using that you could sell for some extra money? Not only will it help you get a jump start on spring cleaning, it will be a weight off your shoulders to have the unused items cleared out.

If you’ve found yourself in a financial situation you are having troubles getting out of, contact the Burr Law Office. We will set up a free consultation to help determine what the logical next steps are.

Money Management Tips for Recent Milwaukee College Graduates

college money managementDuring college, many students are forced to live on limited incomes, relying solely on money from their student loans or financial rations from their parents. Once college graduates secure their first full-time jobs, they may suddenly find themselves with more monthly income than they are accustomed to having. It’s important for any recent college graduate to effectively manage his or her new finances in order to avoid going into severe debt.

Know your credit score

As soon as you borrow money from a lending institution that reports to a major credit bureau, you have established a credit report. Home loans, student loans, and most credit card agencies report to the three major U.S. credit bureaus. In addition, any unpaid utility or medical bills can be reported to a credit agency if the bills are handed over to a collection agency. How you use your credit and pay back your obligations will be used in the calculation of your credit score. It’s important to periodically review your credit score and look for any mistakes to ensure that you are on the right financial track.

Use debt sparingly

You should never borrow an amount of money that you aren’t able to pay back. If you have never had a credit card before, begin by just taking out one credit card. You can also build up a favorable credit score by taking out a secured credit card, which you pay for in advance. You will need to start repaying any federal student loan debt, including Stafford and Perkins loans, six months after you stop going to school.

Live frugally

Even though you might have more income than you were previously used to, it’s important to limit your spending habits. As a young adult, you should be building up savings and emergency funds, not spending your entire monthly paycheck on shopping, morning coffees, or expensive dinners.

If you are facing financial difficulties, Burr Law Office can help. Attorney Burr offers affordable bankruptcy services and will work with your unique financial situation to find your best debt resolution option. You can schedule a meeting by calling (877) 891-1638.

Milwaukee Legal Aid: Creating a Monthly Budget

Making a monthly budget is the first essential task for any consumer after applying for debt reorganization or declaring bankruptcy. After your attorney has helped you eliminate your debts, your first goal should be to get back on track financially. To make a monthly budget that works for your needs and lifestyle, follow these simple guidelines.

Identify Your Expenses

The primary task in making any budget is simply to compare your income to your expenses. First, identify how you are currently spending money, and set goals that take into account your long-term financial objectives. To track your spending and make sure you stay within our budget, consider investing in a financial software program like Quicken or Microsoft Money.

Watch Your Cash

If you are like most people, keeping track of how much cash you spend can be a difficult task. But the first step to getting your finances on track is sticking to your budget, and it is nearly impossible to follow your financial plan when you forget to record daily cash expenditures, from dry cleaning to morning coffees to paying parking meters. Whenever possible, use a debit card instead of hitting the ATM to avoid cash leakage.

Analyze the Details

While it is not necessary to spend hours each day creating new lists and categories, it is important to watch out for what financial experts call spending creep. As your income begins to naturally increase due to promotions or investment payoffs, remember not to adjust your spending accordingly without taking a look at your original budget first. Chances are, other expenses like rent payments have also gone up.

If you have suddenly found yourself buried under a mountain of debt, you probably know firsthand just how exhausting creditor harassment can be. An attorney can put an immediate stop to foreclosure, stop repossessions, and end harassing phone calls. If you are in need of Milwaukee lgal aid, contact Burr Law Office at (877) 891-1638 to schedule a free consultation.