One of the biggest reasons that some post-bankruptcy debtors fail to financially thrive after their bankruptcy discharge is that they don’t understand the basics of personal finance. At first, some post-bankruptcy debtors are extremely frugal to a fault; but within a few years they begin making the same mistakes and need to consider bankruptcy again. So how does a post-bankruptcy debtor avoid floundering financially?

Below are a few tips:

While it’s good to have a budget after you exit bankruptcy, it is absolutely essential that you also have financial goals. For example, do you want to buy a house, invest in retirement, and save for your kids’ college education? The best way to achieve these goals is by creating a plan and strategy for achieving them.
After your goals and a plan are set in place after bankruptcy, it’s time to create a budget which will help you achieve those goals. Which expenses can you decrease? How can you increase your income and what other steps you can take within your budget to achieve your goals? Maybe you need to make lifestyle changes, such as moving to a cheaper city, selling your house or getting rid of a second car. Or, you might consider enrolling your children in public school instead of private school to save money after bankruptcy. Both budget and lifestyle changes should be considered after bankruptcy when creating a strategy to achieve your financial goals.
Change your relationship with debt. Many debtors who file bankruptcy have become accustomed to relying on debt when they are in financial distress or have a habit of not paying off credit card debt when times are good. Post-bankruptcy debtors who want to make the most of their financial fresh start should only use debt sensibly. For example, taking out a mortgage to purchase a modest home or borrowing money to start a business are both good uses of post-bankruptcy debt.