10 Things You Can Do To Avoid Personal Bankruptcy - EVER!
Posted: Wednesday, July 07, 2010
by Donovan Baldwin
No Diet 4 Me
We all know that bad things happen to good people. You may have been doing everything right all your life long and one day, a hurricane named Katrina blows in, or, perhaps, an oil rig named Deepwater Horizon explodes, and all your life's savings are wiped out.
While the best laid plans of mice and men do "gang oft aglay", making plans in advance can help prevent many of the worse results of unexpected events. Making financial plans in advance, and taking the proper steps, can help not only prevent major losses but can also help keep you from ever having to even think about filing for bankruptcy.
First and foremost, you should realize that "managing", as in "managing money" is what English majors call an "active" verb. That means you are "doing something", not just sitting back and letting things happen. When you do something, it is nice to know where you are at and where you want to be. Hence, step 1:
1. Create a budget and include savings as a portion of that savings. A great book, "The Richest Man in Babylon", by George Samuel Clason is a great place to start any journey to financial security.
2. Cut spending. Almost anyone can look around and find ways to reduce their expenditures. I know a lady who constantly complains of being broke, but she has over 1,000 DVD's, each of which cost her at least $10. Do the math. She has $10,000 worth of DVD's gracing the walls of her living room (we won't include the cost of the shelving she has bought to hold them). Most have only been watched one time, and will never be watched again.
By the way, grocery coupons can save you money. I have purchased $120 worth of groceries with $29 cash and $91 in grocery coupons. It is common for me to save as much as 30% of my grocery bill on any shopping trip.
3. Track your spending. Whether you want to save money or lose weight, the experts have the same advice. Write down every penny you spend or every piece of food you put in your mouth. Most of us simply do not know how much we are spending or eating. We only think we do.
I used to stop at a convenience store every morning and buy a cup of coffee and a snack. One day, I added it up and found I was spending over $50 a month on that little habit.
4. Set goals. Again, almost any expert setting out a roadmap for success in their field recommends goals. Goals keep us focused and help us reach our targets.
5. Get a second job. The simplest way to increase income and pay off debt is to work another job. Delivering pizza can pay up to $20 an hour, and you can usually set your own schedule.
6. Create a debt snowball. Take your smallest debt and put extra money towards paying it off. Once it is gone, add that money towards the next smallest debt and increase your payments to that one. Keep doing this, and you will be surprised how fast your bills go away.
7. Pay your bills online. This is a small thing, but most bills can be paid online these days. At the very least, you save postage. However, with online services, you can stay on top of your bills better. You can normally see updated information on payments due, balances, and perhaps even services which can help decrease your debt.
Just for an example, on the webpage where I pay my electric bill, several options are offered, one of which saves me a significant amount of money each month.
8. Get your credit report and score. You are allowed one free copy of your report each year. Take advantage of this. Sometimes, simply knowing what you're up against can help you realize what you have done and what you need to get out the debt you have created. Once you have your report, scan it carefully, and....
9. Correct any errors you find. I can almost guarantee that if you have NOT been doing step #8 you will find errors. This article is not about creating more debt, but, if there are several, or some bad, errors, any credit you DO apply for may wind up costing you more. Also, you might even find out that you have been paying someone who has no claim on you.
10. Stay on top of your finances in the future.
Over the course of our lives, most of us will earn at least several thousand dollars over our working years. Some will earn millions! Most will retire with next to nothing, relatively speaking. Budget, plan, track save, pay off debt...and stay with it, and you can avoid some of the bad financial things that can happen to good people, including bankruptcy.
ABOUT THE AUTHOR
Donovan Baldwin is a 65-year-old amateur fitness guru, freelance writer, certified optician, and Internet marketer currently living in the Atlanta, Georgia area. A University Of West Florida alumnus (1973) with a BA in accounting, he has been a member of Mensa and has been a Program Accountant for the Florida State Department of Education, the Business Manager of a community mental health center, and a multi-county Fiscal Consultant for an educational field office. He has also been a trainer for a major international corporation, and has managed various small businesses, including his own. After retiring from the U. S. Army in 1995, with 21 years of service, he became interested in Internet marketing and developed various online businesses. He has been writing poetry, articles, and essays for over 40 years, and now frequently publishes original articles on his own websites and for use by other webmasters. He offers a line of do-it-yourself legal software at http://legalhelp.xtramoney4me.net.
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