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Should You File Bankruptcy? Part 2 of 5: Consider Your Expenses

Expense Sheet
Expenses is an area that many people do not like to talk about. Before considering bankruptcy, let's look at your expenses first. It is, however, an area where even the smallest changes can make a huge difference in your life. If you find yourself in a situation where you have more month left than money, then it is imperative that you sit down and really review where your expenses are going. 
Fixed Expenses
Every month, you will have a variety of expenses. These expenses can be separated into two types of categories – fixed and variable. Fixed expenses are those that are the same each and every month, such as your rent payment or auto loan payment.
Fixed expenses can include:
Mortgage or Rent Payment
Phone Bill
Insurance (Health, Auto, Life, Homeowners)
Car Payment
Alimony (if applicable)
Student Loan (if applicable)
Variable Expenses
Variable expenses are typically a different amount each month. Some examples of variable expenses are utilities, food, and gas. It is in this area that you can make the biggest difference if you find that you are spending more than you should – especially when you factor in non-essential expenses.
Variable expenses can include:
Personal Expenses (Toiletries, etc.)
Home Maintenance
Auto Maintenance
Medical / Dental
Household Supplies
Credit Card
Daycare (if applicable)
Your Monthly Cash Flow
Once you have added up your monthly income and your monthly expenses, you can get a better idea of your monthly cash flow. This is the number you get when you take all of your income minus all of your expenses. Therefore, cash flow is the amount of money that you have left – or the shortfall you have – at the end of the month.
Income – Expenses = Cash Flow
If you find that you are “in the red” every month, then you will need to reevaluate your spending habits. Even making small changes like eliminating the added cost of premium movie channels from your cable television or the unlimited texting feature on your cell phone can make a big difference in your overall monthly outgo. So be sure to really evaluate what is – and what isn’t – a necessary expense at this time. Bankruptcy in the St. Louis area is our work, but let's first look at the next chapter.

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