Becoming financially secure — and staying that way — can be incredibly difficult. Just ask the thousands of Americans who file for bankruptcy every year. Americans struggle to save money, and emergencies have a bad habit of coming around when you can least afford them. It’s all too easy to fall into the cycle of debt and start defaulting on loans. In the worst cases, you can even end up losing your home to foreclosure.
So how can you avoid foreclosure? You can start by reading the advice below.
Stop wasting money
There are some things that you just can’t help about your financial situation. Large income and wealth gaps in American ensure that many Americans will struggle with their finances. Still, it’s important to remember that your choices matter, too. Not every expense you have is a mandatory one. While you can’t stop paying rent or eating food, you may be able to cut back on the pricey little luxuries that are costing you dearly (or at least find ways to get them for less).
One example of wasteful spending is the way that many people treat modern technology. Some superfans of high-tech gadgets rush off to buy the latest model of the iPhone every time a new one comes out, but you don’t have to do this to waste money on tech. Perhaps you only buy a new iPhone when your old one stops working — but that still might be wasteful. Many Americans don’t appreciate how tough modern devices can be, explain the experts in iPhone repair at uBreakiFix, and how often those devices can be salvaged when they stop working. You wouldn’t throw out a pricey appliance or a car if it broke down, so why are you doing that with your $1,000 phone?
Build an emergency fund
Experts say that most Americans don’t have enough cash on hand to handle a $1,000 emergency. That’s bad news, and not just because it’s symptomatic of the problems Americans have with money. Not having cash to cover an emergency is more than a symptom — it’s a cause. Run into a problem without cash on hand to fix it, and you could end up putting charges on your credit card or taking out dangerous short-term payday loans. This starts a cycle of debt.
You can avoid this fate by saving carefully and setting aside some of your savings in a place where you can quickly access it — like a checking account, for instance. This rainy day fund is your solution when things go off the rails unexpectedly. Until disaster strikes, though, don’t touch it.
Know your legal options
Debt and foreclosure are scary things. They can also be complicated. That’s why it often pays to turn to experts. Financial advisers and other professionals can help you get organized and tackle your debt — and, if all else fails, attorneys can help you file for bankruptcy. That won’t be a pleasant process, but it will give you a chance at a fresh start.
Bankruptcy is a powerful thing — in many cases, it can even stop foreclosure proceedings in their tracks. It may or may not be the right choice for you, but it’s an option. Only an attorney who is familiar with your situation can give you legal advice on bankruptcy and related matters, so schedule a consultation if you want to explore that option. Debt and foreclosure are upsetting and scary, but they don’t have to control your life or your future.