To avoid getting into serious debt, we all need to live within our means. This does not mean that we cannot treat ourselves every so often; vacations and other financial splurges can be enjoyed as long as you are being more frugal where necessary to afford these treats.

If you have found that you have been recently spending more than you have been earning over a prolonged period of time, it is important that you do not simply ignore this situation and hope that it will spontaneously change. Instead, you should start to look at your budget now. By doing so, you may be able to avoid bankruptcy further down the line.

Write down your fixed income and expenses

Many people do not have a good knowledge of what their fixed income and expenses add up to. If you have a stable income, it should be relatively easy to calculate how much you will have left each month after paying rent and buying essentials such as gas and food.

Identify your unhealthy habits

By looking at your bank balances over the last months, you may be able to identify unhealthy habits that are leading to you spending more than you make. This could be due to eating out often or buying new clothes. Alternatively, you may notice that expenses such as your car loan are the main culprit. Having knowledge of your situation will help you make the adjustments that are necessary to avoid further debt.

If you believe that your debt has become out of control, budgeting may no longer be an option for you. In this case, you may be able to benefit from a bankruptcy filing.