10 Tips to Secure Your Future and Avoid Bankruptcy

1. Know your retirement needs.
Understand your financial future by calculating how much money you will need to make to maintain your current lifestyle or a lifestyle that you wish to start living once you are retired. Standard of living is important to maintain and you don’t want to have to lower your standard of living from when you were at work just because of poor planning.

2. Know Your Alternatives
If you are contemplating filing bankruptcy, try some alternatives first before heading down that road, as it can be a long, expensive process that you hurt your credit for a lengthy period of time. Some of these options are debt consolidation and contacting your creditors and credit card companies to lower the interest and/or the balance. Often, if you have a significant potion of your bill that you can pay, the debtors will be willing to write the rest off as a loss. Talk to them about your options.

3. Find out about your Social Security payments ahead of time.
Most of the time, social security pays up to 40% of what your earnings are before you reach retirement. It is also good to check into any profit sharing or pension plans that your employer may offer. Request a statement if such a program is offered to help you better plan your retirement.

4. Contribute to a 401(k) or like programs.
If your employer offers a retirement plan such as this one, contribute all that you can afford to contribute from each paycheck for as many years as you can. You taxes will be lower, and if your company has a matching program, they will contribute a certain percentage of what you contribute, and possibly up to 100% of what you put in. If your employer doesn’t offer a program like this, ask them to begin. They may tell you that they will not begin to offer one, but that is the worst that can happen.

5. Work more hours at work or a second job
As undesirable this option is, as it takes away from your free time and time with loved ones, it may be a necessary choice for a temporary period of time in order to pay down enough of your debt. When you debt becomes affordable again and you can make payments with your primary job’s salary, then you can quit. Remember, financial hardship is one of the top reasons why families divorce and relationships suffer so the sooner you can relieve you and your family of some financial stress, the better your family and their happiness will be. Do not let financial issues get between you and the ones you love.

6. Being an IRA
Even if you already have a 401(k) or another type of retirement planning program, you can still put aside money into an IRA. It is tax deferred until retirement and you will still earn interest on your investment. It is another way that you can better prepare yourself to sustain your standard of living for retirement.

7. Create a budget and stick to it.
Creating a budget each month for each estimated paycheck will help reduce impulse spending and spontaneous purchasing decisions that could put you in the hole. Whether you are making a budget as a married couple, or a single person, sit down and do it once a month and hold yourself accountable for your purchases.

8. Don’t dip in to your savings.
If you are enrolled in any of the above programs, do not touch the money that you have invested into these programs before retirement. Not only will there be severe penalties for doing so, but you will be moving backwards instead of forwards. Instead, try to keep a certain level of money in a savings account that you have with your bank that you can use for emergencies such as medical emergencies, a loss of job, etc and be sure that there is enough in your savings to sustain you and your family for six months and do not touch it.

9. Know Your Plans
It is important that if you are investing in any of these programs that you know how your money is being invested and that you are comfortable with it. If you are not comfortable with investing your money in the stock market, given the economic circumstances, make sure that you specify that and know where it is going. Do not be afraid to ask questions, no one is expecting you to be an expert in financial planning.

10. Sell assets that you can afford to lose.
If you have several cars, a boat, an RV, or any other excess “toys” that you many not use often or may not necessarily need, these are your first things that you should look into selling. If one person stays at home while the other works, have the stay at home person drop the other off and pick them up from work in order to sell the other car. This will save you money in car payments, insurance, and other undue expenses like automotive work and can help you reduce your debt. Do this until you can get on your feet again and buy another car. You can also sell both cars and get a more economical car that is much less expensive. This will also dramatically reduce your reoccurring bills.