When you declare bankruptcy these days you have to go through (and pay for) two sessions of mandatory financial counseling. You can do it online. I took my courses at Greenpath.
I'm actually (ironically?) fairly financially savvy, and the courses were very basic, so I there wasn't too much I didn't already know. The exception was the things specifically about bankruptcy itself, because no one talks much about it. I imagine this is because you don't really want to encourage the entire country to declare bankruptcy, but all of that information was very much, I wish someone had told me this three years ago. Heck, nine years ago.
I believe that the number one regret about declaring bankruptcy is not having done it sooner.
So, for the most part the financial counseling was just a hoop for me to jump through, but it was kinda nice to get a little financial refresher as I was starting to look towards post-bankruptcy life. It did get me thinking forward, which was good.
In particular, I was excited to think about financial goal setting post-bankruptcy. For much of my life, I've sent between $600 to $1,000 a month to debt, so it felt like bankruptcy would be more of a relief, but the reality is that my decrease in income since 2009 (20%), in addition to the decision to move into my own apartment, means I don't have all that much income to play with.
I thought about how great it would be to start to invest. But I don't have available funds for that right now.
I thought about how great it would be to contribute the yearly maximum to my HSA (health savings account). But I don't have available funds for that right now. (I put in about $100/month and have been using that to pay medical bills this year - lots of catch up in terms of dental, etc.)
I thought about how great it would be to save 2-3 months expenses in my savings account.
Then I thought about how great it would be to save $500 just to start.
Then I thought about how it would be a pretty reasonable goal to just not touch the $25/month that gets automatically transferred into my savings account. That would someday add up to $500. It would be a start.
So every month, when I transfer that $25 back into checking, I remind myself that it's my money, and it's my cash that I'm spending. And it's cash.
And I've started paying on my student loan again, which is now more than I borrowed and at the current rate will be paid off in about twenty years. But, I'm making the payments. And I have a goal not to ever put my student loan in forebearance again.
Looking over my first year since the moment I stopped using and stopped paying my credit cards - call it my first year I stopped working for the banking industry, student loan aside - I wish I could do more. I wish I was better off. I wish I had the ability to be pulling off more substantial financial goals in this first year.
But October marks one year I've lived without credit cards since I was 18 years old. This year I got my car air conditioning fixed, my cavities filled, and paid for the bankruptcy itself, which with a lawyer came to almost $2K all together. And I did that all with cash.
I have a really tight monthly budget and much like when you start counting calories, when you have only your cash you really begin to understand how much money you actually have and how you actually should be living. I intimately understand now how debt creeps up when your budget is really tight and credit's sitting right there saying, What's a little run to the grocery store two days before payday? Every month.
Because now, I have no choice but to raid my cupboard and eat beans from a can if that's where I've gotten myself. Frozen peas and brown rice, people. It's a revelation.
And it's really painfully easy to say no to awesome opportunities when you flat out can't pay for them. No way, no how. And, life goes on. It's not good, but it is what it is.
I'm 41 years old, and this past year I learned a lot about life without credit. I thought I would feel richer, but most days I don't really. It feels like everyone else has more money or credit or both, so when I'm down to less than $10 before payday it certainly feels like I'm a broke ass, and that's discouraging and frustrating. But I prefer this life to the one I had before. It's amazing and empowering not to have credit card debt. And I never want to go back. I don't want to work for the banking industry ever again.
One year down without credit cards. A new life with just my student loan debt and a lot of possibility for growth moving forward. It's a solid foundation.
So I thought about surviving and learning to live with the money I have today and covering some expenses I'd been having to put off, and I decided that that was a pretty good financial goal for Bankruptcy: Year One.