Obviously none of this matters if you never get to the point where
bankruptcy is your only option. Some tips to remember:
Pay attention to your
household finances, even if you are not the partner who is "good with
money". Many people get into trouble because their partner is
accumulating debt secretly, or after a divorce or death of a partner when
they have no idea where the money is and are inexperienced with keeping
financial records.
No matter how well you are
doing, don’t forget to save! Too many people continue to upgrade their lifestyle
as they earn more money instead of increasing their savings. We have all
heard about Enron and Worldcom, layoffs in major industries, and people
who are burdened with huge medical bills, so we all know the importance of
savings and emergency funds.
Don’t put frivolous purchases
on a credit card. If you need to make a large purchase, start saving for
it before you put it on credit. That way, you can pay most or all of the
bill when it arrives, instead of adding hundreds or even thousands of
dollars in interest to your cost.
If you see yourself starting
to get into trouble, make changes right away. Debt tends to accumulate
faster and faster and can get out of control before you know it
Keep track of your daily
expenses. Even the little ones like a cup of coffee or parking fees at the
beach. You will be amazed by how much those small expenses add up. And
once you know exactly where the money is going, you can figure out where
to cut back.
Call your credit card issuers
and request an interest rate reduction. Most consumers are unaware that a
simple phone call can save them money on their interest payments.
Study after study shows that
people who make most or all of their purchases with cash spend less money.
If this seems like an impossible task, try using cash for one expense that
you always use the credit card for, and add on from there.