April 14, 2024

Bankruptcy is a bit of a taboo topic in the USA. A lot of people have gone through it and yet nobody wants to talk about it or let it be publicly known. Small wonder, when you consider what it actually means – that you were unable to pay your debts which instantly marks you as a bad person in the eyes of the capitalist society.

However, there are various reasons one can go bankrupt, and so there are various types of bankruptcy. You can learn about the most common types here https://www.thebklawyers.com/bankruptcy-attorney-san-diego-ca/. However, can you do something to avoid bankruptcy in the first place? Here are a few tips which may help you.

Get Rid of Debt

Any time you are left with a bit of extra disposable income, you may think it’s a great time to treat yourself to something new. Many people enjoy shopping or going out to expensive restaurants. While that is a great way to gain awesome experiences and valuable items, you could do something better for yourself, particularly if you are fresh from college.

Paying off a portion of your debt may not seem as glamourous and interesting, but in the long run, it will enable you to have abetter credit score, ensure that you have lower interest rates and over time need to spend less money paying it off every month.

Manage Your Income

Having a steady income is great and it lets you do a lot of things. However, when planning your monthly budget, it is advisable that you do not include all of your income. What it essentially means is that you should live slightly below your means. Most financial advisors will tell you to put away 20-25{ee2a2ced2e83a70af3b12a5f5f4bc88f1c095ae1846c54ee750c7ec9c020c045} of your monthly income.

Depending on your wages and expenses, that may not be feasible, but you should try your best. If you want to make this tip work on a budget, rethink your shopping habits and what your shopping priorities are.


One of the smartest things you can do with the extra money you have decided not to spend outright is to put it into a savings account. There are numerous banks and other financial institutions which offer great benefits for savings accounts. Look around for the best options for you and open an account to give yourself some financial leeway.

Most experts will recommend having at least $1,000 in your savings account, but if you can put away more, by all means, do so. It will help you in case of emergency, be it medical or any other type. More importantly, you can also rely on this emergency fund in case you lose your job, or if you decide to pursue a more lucrative job.


Finally, if everything went according to plan, and you have managed to free yourself from debt and you have some money saved up, you are ready for the final step which can help you be financially viable and more independent. Investing the disposable income is the responsible thing to do. Most financial advisors will recommend that you first pay off your debt and accrue some savings before you plunge into the investment world.

If you are not going to be actively involved in your stocks as a daily job, you are better off buying safe and consistent stocks rather than volatile and high-risk ones. The yields will be lower, but consistent and you won’t have to worry about them much.

These are sound tips about financial responsibility, but you cannot always influence the events in your life, so if you are ever facing bankruptcy, you had best contact an experienced and skilled bankruptcy attorney to help you decide what to do.

To contact The Bankruptcy Lawyers Chang & Diamond, APC
9089 Clairemont Mesa Blvd, Suite 110, San Diego CA 92123