Save Now, Spend Less, Avoid Bankruptcy In 7 Easy Steps

20 Dec Save Now, Spend Less, Avoid Bankruptcy In 7 Easy Steps

“You can’t always get what you want”, sing the Rolling Stones, “but if you try sometimes, you might find you get what you need” by following these seven super not secret easy to follow steps to financial freedom and avoid bankruptcy.
In this order:
1. Destroy all credit credit cards and close the accounts. Pay with cash, or with a trendy debit card, for all purchases but your mortgage. If you cannot afford something, realize you cannot afford it. Do not charge everyday purchases and do not use a credit card to accumulate rewards. If you mindlessly follow an actor in a viking costume telling you to charge stuff, turn off the television.

2. Build an emergency fund equal to 6 months of your normal monthly living expenses for unexpected events. Paying a credit card is not an emergency. Bills while unemployed qualify for emergency. So do unexpected auto repairs, but not routine maintenance, gas, oil change or brake job. Routine expenses or repairs are not emergency expenses. Budget for all routine expenses before you spend that paycheck.

3. Save money for a home, 25%, 30%, or better, part for the down payment and part for new items, such as furniture, yard work, improvements, to go with the house. Do the same for a vehicle. Make these regular budget items.

4. Maximize the free money your employer matches on your 401 (k) contribution. You may be able to contribute more tax deferred money to your 401(k) than the amount necessary to max out the employer match, but do not do that, until you complete the other steps.

5. Maximize your Roth IRA contribution. Ask your tax adviser about the benefits of a Roth IRA compared to a traditional IRA.
6. Next, go back to your 401 (k) and pick up any leftover tax deferred amount.

7. Live like no one else now so you can live like no one else later, says my financial planner, Ted Adams.
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Andy Miofsky, Esq.

Andy Miofsky holds the highest AV PREEMINENT rating from Martindale Hubbell Law Directory and a perfect 10.0 from AVVO. Andy is an Illinois consumer rights lawyer with offices in Granite City Illinois. Andy represents people with bankruptcy and student loan debt problems throughout the Southern District of Illinois since 1979.
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