Avoiding bankruptcy is possible if you learn to avoid bad financial habits that commonly lead to economic distress. Also, the earlier you discover them, the better.
Americans have become a nation existing on credit. There are a lot of explanations for the increase of the “credit habit” in the U.S., but it fundamentally boils down to a longing to have “things” right away. In lieu of waiting and saving, Americans commonly take out a credit card and get whatever they wish for NOW. And, there are 1000’s of credit card companies offering this opportunity to one and all.
It is, of course, interesting to note that a good portion of people filing bankruptcy every year in the U.S. are doing so because of high credit card payments. Unquestionably, it happens to be extremely easy for credit to get out of hand.
There are, nonetheless, three things you can do at once to start down the right financial path to make sure that you never need to file bankruptcy.
1. Learn to Live Within Your Income
The number one technique to be sure you stay away from ever having to file bankruptcy in your life is to learn to live within your income. This is especially true for young people. Parents, teach your kids to use credit responsibly. And, if you’re in college, don’t fall into the credit card debt trap. Limit yourself to one credit card with a low credit limit and use it only for emergencies.
2. Use Debit Cards Rather than Credit Cards
Debit cards are generally offered now by most banking institutions. The benefit of a debit card over a credit card is that the cash is taken directly from your bank account. So, it is like paying with cash, not credit. And, in view of the fact that more debit cards have either a VISA or MASTERCARD logo, you can make use of them at the identical places as you would use a credit card.
3. Discover Proper Financial Management
One of the best ways to learn how to circumvent bankruptcy is to take a seminar or other course on financial management. Check your area library or university to see if they offer anything in the area of finances and financial management. With the proper training, you’ll learn which items are sensible to obtain on credit (i.e., real estate) and which you should stay away from paying for with credit (i.e., vacations). Furthermore, a high-quality financial management class will give you a good understanding of suitable investment approaches so that you are using interest to multiply your money, not repay credit.
These 3 techniques are awfully easy to implement. If you’ll start doing them today, you will make sure that you never find yourself in the position of having to choose whether or not to file bankruptcy.
About the Author:
Harvey L. Cox is an attorney and certified mediator. He runs an informational web site for bankruptcy debt relief that discloses alternatives to bankruptcy, gives plain english explanations of bankruptcy law and provides insights into recovering from bankruptcy. Make sure you check out The Bankruptcy Debt Relief Center.