Getting rich requires focus, discipline and hard work. It is difficult to become rich.
On the other hand, going bankrupt-it’s really easy. Super easy! In fact, most of us may have only one misfortune away from it.
But the good news is here. By being proactive, you can help yourself avoid these pitfalls.
Here are the fastest ways to go bankrupt—and what you can do to avoid them.
1. Live within your means
Too many of us feel guilty about this because we live in a consumer society and Instagram culture: Look at me, look at me, see how successful I am.
The following are examples of making ends meet:
- As a “poor man,” he has a dream home and a huge mortgage that he can hardly afford
- Move to the city of your dreams without income
- Buy an expensive car to impress people
- Travel overspend
Get in the habit of spending less than earning.
2. No emergency fund
A frugal life can also allow you to establish an emergency fund. If you don’t have an emergency fund, unforeseen emergencies may force you to maximize the use of credit cards and/or borrow money. Then you spend money to repay the expensive interest.
The emergency fund is an easily available amount of money, equivalent to three to six months’ salary, in case you lose your job unexpectedly. In the past year, millions of us have lost their jobs unexpectedly.
along with Wish spending account, You can earn up to 5% cash back through debit card purchases. Using an Aspiration Save account (where you can remit tax refunds), you can get up to 20 times the average interest on your savings balance. (The FDIC reports that the average account’s income is only 0.05%.)
Need five minutes Sign up.
3. Wrong investment
Investment is a key strategy to increase capital. However, you can make a lot of bad investments!
For example, pay attention to a multi-level marketing plan. With the support of well-known brands, direct selling companies may be an opportunity to attack independently. But the MLM model is easy to be deceived, so do your research before registering and handing over the start-up capital.
A more direct way to invest is through similar apps Robin Hood. Whether you have $5, $100 or $800 in spare money, you can start from there.
Yes, you may have heard of Robin Hood. Investing beginners and professionals like it because it does not charge commissions, and you can buy and sell stocks for free-no restrictions. In addition, it is very easy to use.
What is the best?When you Download app And fund your account (just a few minutes), Robinhood will deposit a portion of free stocks into your account. However, this is random, so the value of the stock may range from $2.50 to $200-this is a great boost to help you build an investment.
4. No budget
Don’t want to go bankrupt? Don’t want to make a budget? Try budgeting for people who hate budgets.
The 50/30/20 budget method is one of the easiest ways to control expenditures. No need for a 100-row spreadsheet or major lifestyle changes.
This is how it works: divide your total monthly after-tax income in half. This is your basic budget (50%). Divide the rest into personal expenses (30%) and financial goals (20%).
Let’s break it down: For utilities, groceries, drugs, minimum debt payments, and other basic expenditures, this is 50%. Then there is 30% fun: Thai takeaway, your Netflix subscription, dress up a skull for Halloween on your lawn.
This leaves 20% for your financial goals, such as additional debt relief payments (any amount above the monthly minimum payment) and retirement savings and investments.
This is a wise way to avoid bankruptcy.
5. Burning money credit card interest
Due to the high unemployment rate, more and more Americans are struggling financially, and they are maxing out credit cards. The interest rates these cards charge you can quickly rise to over 20% and continue to eat away most of your income, so that you can never succeed.
The truth is, your credit card company doesn’t care. It just gets rich by blackmailing you at high interest rates.But there is a website called slim Shady Want to help.
If you owe your credit card company $50,000 or less, AmOne will match you with a low-interest loan, which you can use to repay every balance you have.
benefit? You will need to pay a bill every month.And because the personal loan interest rate is low (AmOne interest rate starts at 3.99% APR), you will get out of debt That Much faster.
AmOne will not let you line up or call your bank.If you are worried that you are not eligible, you can do it for free online search. In just two minutes, it can help you eliminate this red flag in your life-once and for all.
Mike Brasfield ([email protected]) Is the senior writer of The Penny Hoarder. He is not rich, but he is not bankrupt.