Financial freedom is a situation which many aspire to. To be financially independent you need to clear debt and finding a way to avoid seeing yourself indebted to creditors. Falling into debt for too long, and failure to honor the deficits can lead to bankruptcy which will affect your future financial standing significantly. If you have bankruptcy Brampton there are professionals who can help you navigate the situation.
If you have not gone down that road of financial inadequacy, relax, here are several habits that you need to stop to avoid falling into this financial pit. Among them include:
1. Irregular payment of bills
Paying your bills on time is very crucial if you want to maintain a good credit score. One of the ways to avoid this is to pay your bills in good time. Avoid placing automatic bill payment orders with your bank as it desensitizes you from tracking your spending habits.
2. Not budgeting
Budget appropriately, and within your means. This helps in curbing over-expenditures and accumulating too much debt that could lead to bankruptcy. Include all your utility bills in your budget, extra expenses like shopping and entertainment and, most importantly, make provision to save at least 10% of any monies that you receive.
3. Not saving
As is usually said, failing to plan is planning to save. Savings are convenient in cushioning you in case of any unforeseen eventualities like job loss, paying for college, buying a house, etc. Ensure you not only set aside money for retirement, but also have an emergency fund that you can count on for all your expenses for at least five months.
4. Getting multiple credit cards
Credit cards are one way of desensitizing yourself from your expenditures. It leads to you accruing massive debts without realizing. To curb this, maintain a manageable number of credit cards that you can pay off quickly to avoid falling into bankruptcy.
5. Paying the bare minimum on your credit card debts
Still, on credit cards, the minimum payment is one sure way to ensure you are ever indebted to your credit card company and increase the risk of going bankrupt. This is because they charge exorbitant interest rates on the monies you leave unpaid each month. Ensure full payment of your credit card debts to avoid falling into this financial trap.
6. Failure to insure yourself
Insurance protects us from unforeseeable risk. It is crucial, therefore, to ensure you insure your main assets such as property, health, and car. This will cushion you in case of any catastrophic events that could lead you to bankruptcy. If you have various, assets, an easier way is to get an umbrella cover that allows you make single payments that cover for everything.
7. Failure to keep tabs on your credit report
Your financial information is fundamental in various aspects of your life, it dictates whether or not you get that loan, job, insurance cover, etc. As such, it is essential always to be updated on your financial credit report at any one time.
Financial intelligence is vital in preventing bankruptcy and ensuring a secure financial future. Therefore, avoid these harmful habits that could lead to financial ruin and make a positive change when tackling finances.