Tuesday, June 11, 2013

Financial Calculator: Avoid Bankruptcy

avoid bankruptcy

Even in the worst times, it is possible to avoid bankruptcy. There are, of course, some cases when it is virtually impossible. For instance, many people end up going bankrupt because they suffer a severe illness and, even though they may have a very good job and plenty of savings, they soon find all of their money drained away paying for medical expenses.

Avoiding bankruptcy is an attainable goal, however. It does require that you pay attention to your finances and that you learn to live within your means. Contrary to what you might be thinking, even if you don’t have a very high income, it is possible to live very well within your means. The reduction in stress in and of itself is a benefit.

Get Educated

The first thing you need to do is to understand how much money you have coming in, how much you have going out and any deficiencies between the two. One way to do this is to determine whether or not you could survive financially if you missed a single paycheck. If you could not, it’s imperative that you reduce the amount of spending you do – if possible – and that you start trying to put money away. You should be able to survive for at least a couple of months on your savings, if you should lose work.

The second part of getting educated means learning a bit more about finances than you do already. While most people understand the basics of finances very well, many people stop learning about them as they age and, as you age, money becomes more important. Taking a class at a community college or even online might give you some insight into how you could better manage your finances.

Talk to Creditors

One of the worst situations you can get yourself into his when you have people to whom you owe money who have no idea why they’re not getting paid or what’s going on with your situation. Talk to your creditors. If you follow a smart strategy you may very well be able to persuade them to give you extra time to pay off debt, to reduce your payments or to help you by taking other measures that may alleviate some of the financial pressure.

Dump Your Cards

If you have a wallet full of credit cards, you’re going to want to get rid of the ones that have high interest rates. Credit cards can easily put you into bankruptcy, all the while making you feel like you have enough money to spend. Another smart strategy with credit cards is to only use them for emergency expenses, so that you can lessen the impact of an unexpected bill, and avoid using credit cards for frivolous things.


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