What do Mike Tyson, MC Hammer, Mozart and Burt Reynolds all have in common? Of course they are all celebrities in one way or another, and all male, but even more than that, they were all deep in debt and/or filed for bankruptcy.
It seems everyone is looking for ways to make more money, but apparently having more money, doesn’t mean you will be free from financial problems! So how do those people who make millions of dollars end up filing for bankruptcy, and how can you protect yourself from ending up just like they did?
Always Be Aware of Your Finances
It doesn’t matter how much money you make in this world, it comes down to how you choose to spend it. Wealth doesn’t come by making millions of dollars, wealth come by saving as much as you can. The celebrities previously mentioned made lots of money, but squandered it on homes with thousands of square feet, dozens of expensive cars, fabulous parties, expensive jewels, and other frivolous expenses.
No matter how much money you have or make, you have to control your spending!
A recent article on BankTruth, “Better to budget, or to be frugal?” talked about the difference between living frugally and using a budget. When it comes to controlling your spending, a budget is the best option to help you really know how much money is coming in and going out each month. By setting up a budget you can more clearly identify what money is being spent on needs and what is being spent on wants and luxuries. Living within a strict budget can be difficult, since life can be very unpredictable, but being aware of your money is necessary to stay out of financial problems, or financial ruin.
The basic foundation of a good financial plan is having some type of a savings account. The second step, actually save some of your money. When you save money, you are not just putting money away for a rainy day or an emergency, but you are teaching yourself to be disciplined when it comes to money. Controlling your spending is a necessary step to take in order to have any money leftover to put into a savings account. There are a variety of different ways to keep your money protected from yourself. Some of the most obvious ways include: money market accounts, certificate of deposits, savings accounts, retirement accounts, and even checking accounts. By investing your money in any of these FDIC insured accounts, your money will be protected from frivolous spending, as well as bank failure.
Enjoy Your Life
People might think saving money means not being able to enjoy life. Knowing how much money you have and spending wisely can actually help you live life to the fullest. There is peace of mind in knowing you have some money saved for the future. Those celebrities seemed to be enjoying life by spending all their money, but eventually the money runs out, and there are still things left to buy.
Be wise with your spending to ensure you will avoid making the same mistakes these so called “rich” celebrities made. Find a financial balance that works for you in knowing how to live with money, so one day, you don’t find yourself without any.
Money: Can’t live with it; can’t live without it!,