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Often enough, financial decisions that lead to bankruptcy may not seem obvious when you just start making them. However, as these decisions turn into habits, you will find yourself wondering where all your money went and you start scrambling to get a grip on your finances. Thus giving birth to the need for bankruptcy lawyers in Baltimore, Maryland, or anywhere else. And while some situations leading to bankruptcy are caused by conscious decisions made over a period of time, sometimes unforeseen situations blooming into financial crises can also be the root of your problems.
Now, let’s take a look at some of the most common money mistakes that can spiral into bankruptcy. And if you’re also dealing with spending habits that are hard to curb, you might want to look at our list to see if it’s finally time for you to reevaluate some of your financial decisions. Then again, if you’ve come to the point where you already need to file bankruptcy, it’s time to hire an experienced Baltimore-based bankruptcy lawyer to help you wade through the process relatively unscathed.
Spending on everyday cravings or purchasing luxury items here and there may not seem like much to you, but every little item adds up at the end of the day. For instance, if you spend a total of $30 weekly for dining out or buying unnecessary goods, that would cost you an extra total of $1,560 that could have gone towards several extra payments. This may not matter much to you if you are earning a lot. But if you are experiencing financial hardship, avoiding unnecessary expenses really matters.
Relying Too Much on Credit Cards
Yes, credit cards are useful for a lot of things. But if you use it to pay for every little expense on a daily basis, you will rack up a huge amount of debt in no time. This is because people tend to spend more when paying with credit thinking that they can just pay off the expense later on. Lastly, it’s harder to pay close attention to track your budget when you keep on using your credit card all the time.
Getting Behind on Payments
Falling behind on house or car payments can create a cycle that is difficult to break. What’s more is that you will end up paying more every time you fall behind because of late fees or other charges. Eventually, your credit score can get damaged, and that will also affect your financial capabilities in the future. So always make sure to catch up on late payments and stick to your budget so you don’t run out of funds.
House and car payments are understandable and necessary. However, if your monthly or yearly payments consist of different streaming subscription services, high-end gym memberships, music services, and credit payments on other luxury goods, then maybe you need to reevaluate your financial decisions. This is especially if you want to save more money or if you can’t exactly afford to splurge on luxury. Remember, focusing on necessities can go a long way towards increasing your savings and protecting you from financial hardship.
Living paycheck to paycheck, not having a budget plan, living on borrowed money, not investing in retirement, and quitting your job without a plan are also some of the most common money mistakes made by most people. Bad decisions pile up and catch up with you over time, and that’s a tough situation to get out of, especially when it comes to money. But if you’re already experiencing that dilemma, trust Attorney Richard Hackerman to help you with your case. He is an experienced Baltimore-based bankruptcy attorney who has handled countless cases like yours.