The little things that lead to bankruptcy

Life these days can be very rough. Many people find that spending money on clothes, eating out frequently or finding new hobbies helps them cope with stress. It is important to prioritize self-care, but you should still be mindful of your spending habits to avoid accumulating excessive credit card debt.

Living beyond your means

Spending money can make people feel good or allow them to project a certain image. After all, it’s nice to reward yourself every once in a while.

However, if you are constantly buying things you can’t afford or feel pressured to, you may find yourself in debt sooner or later. Take a good hard look at your expenses and your next paycheck. If you are spending more than your income, it may be a good idea to start cutting back.

Misusing your credit card

Credit cards not only make it easier to spend money, but they may also offer rewards and purchase protection. However, in the wrong hands, relying on credit could be a slippery slope toward debt.

Many individuals thrive on instant gratification, which credit cards provide. A credit card lets you buy products without cash, which can lead to reckless spending. Even if you’re simply purchasing iced coffee or new shoes, small unnecessary expenses can add up.

If you reach a point where you can only afford to make the minimum payment and cannot pay the balance in full, you may be subject to high-interest rates and late payment fees. Every month you are unable to pay will just increase the total amount you owe until it becomes too much to bear.

Having no emergency funds

Setting aside at least three months’ worth of expenses as an emergency fund is a crucial step toward financial literacy. Yet, about one in four American adults have no emergency funds at all.

Prioritizing avoidable expenses over your savings and emergency funds can have negative consequences. You never know when something out of your control will affect your finances. Without a safety net, a health problem or setback such as unemployment may lead to financial ruin.

Today’s consumer-driven society makes it easy and tempting to spend money constantly. You may find it harder and harder to differentiate between your wants and needs. While bankruptcy can help people with crippling debt, it’s not for everyone and has long-term repercussions. Practicing self-control while your debts are still manageable may be more effective.

Attorney Brad Hawley

Attorney Brad HawleyAttorney Brad Hawley possesses years of practical experience focused on bankruptcy, civil and criminal defense. He has prosecuted and defended clients in state court, and is a former enlisted member of the United States Army. Brad is driven by his desire to help people that have been hurt by the legal system, and is dedicated to fixing injustices he sees around him. [ Attorney Bio ]

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