Monday, December 14, 2015, AM | Leave Comment
No matter how good you are at budgeting, if your monthly expenses are close to your income there are several catastrophic events that can turn your finances upside down and lead to long-term debt or bankruptcy.
The amount of debt that the average consumer has is considerable and many people don’t plan for unforeseen issues, regrettably.
In order to avoid the agony of getting trapped in a debt spiral, avoid the following six things at all costs.
Underemployment and Unemployment
While it is difficult to avoid layoff if the company you work for is downsizing, maintaining high work standards and continuing your education are excellent ways to make yourself valuable to a company and able to get another job in case one ends.
The longer you stay unemployed or in a job with no advancement and a low salary, the greater the chance you end up in debt.
Bad Budgeting and Poor Financial Decisions
Many personal financial struggles are caused by bad money management and living beyond your means.
Learn how to create a working budget and stick to it no matter what.
One large expenditure on a credit card can turn into a mountain of debt as interest charges stack up.
Not Building a Financial Buffer
Everyone should have a minimum of three months of living expenses in a secure, low risk savings account in most financial experts recommend six months or more.
Trade immediate satisfaction for long-term security and avoid having your financial house flipped upside out.
Divorce or Separation
While you should not stay in a bad marriage just to save money, this change of relationship status is one of the most common reasons people end up in debt or struggle financially for years.
If you face the situation, talk to a lawyer and accountant or financial planner to learn how to protect yourself.
Excess Medical Bills
A catastrophic illness or injury can bankrupt the family in short order if the health insurance is not sufficient for the bulk of the expenses.
For example, being involved in a DUI can have ramifications for all parties involved. Contacting Ben Sessions, a Georgia DUI attorney, can be one of the smartest moves you make financially.
Even a short hospital stay can reach the tens of thousands of dollars and ongoing treatments can affect financial stability for years.
In the United States, more people declare bankruptcy due to medical bills than any other reason.
Gambling or Taking Undue Financial Risks
One reason for financial upheaval that is completely avoidable is gambling.
What should be an occasional afternoon of fun turns into a debt producing nightmare for people who take excessive risks with their money.
Never jeopardize your future by borrowing or using credit in order to fuel a gambling habit.
There are many pieces of advice that individuals can take or leave depending on their specific situation.
Make sure you are thinking of all avenues for which you might be able to save money so you can get you of debt as fast as possible.
Nothing is quite as freeing as knowing that you are able to afford the comforts your deserve.Facebook.com/doable.finance