Ten things not to do in order to avoid financial ruin
Before we talk about ten things not to do in order to avoid financial ruin, it is important to discuss one major point that you must do. It is to sit down with your spouse to have a look at your expenditure vis-Ã -vis your income. If the expenditure exceeds your income much too often, you may just be on the way to financial ruin. Do not take loans unless it is essential. Credit companies in their own interest will try to tempt you in doing just that, but you must try to fight it back.
In fact, if you ask me what you must do in order to avoid financial ruin, I will say, fight temptation. Why, you must already have hundred pretty dresses! Why do you want to buy another in spite of knowing that you simply cannot afford it? Do not take loans rampantly and even if you do, make sure that you know how to pay it back within a reasonable time. Remember, if you cannot do that, the spiraling interest will soon push you deep in debt and in extreme cases even into bankruptcy.
Here we must take note that the uncontrolled use of the credit card can often push us into such a situation. Credit cards can come very handy in some cases, but it can also ruin you totally, if you use it without any thought. Home loans too can ruin you financially, if it is taken without any kind of consideration. Make sure the loan amount is not too high for your financial status; it can lead to financial ruin and ultimate foreclosure of debt and repossession of the property by the lending authority.
It often happens that buoyed by the property brokers and loan officials, a person takes a loan that he can never repay. This is called âpredatory lendingâ. It is an unscrupulous act carried out by some dishonest mortgage companies. They will convince you into borrowing too large an amount at too a high rate. You may pay off quite a few installments, but will ultimately fail to make further payment. The lender will then move in to foreclose the debt and repossess the property. The installments already paid naturally remains with him.Â
Today, the ambience is such that it is almost impossible to do totally without any kind of loan. It is only required that you must show restraint and prudence while accepting any kind of credit. At the same tome, it is important that you buy sufficient amount of insurance coverage to insure your life, your home and car. Accidents can occur any day and if you have to buy a new home or a car, it will definitely drive you towards financial ruin.
Unexpected and uncovered medical expense can ruin you totally and so buy adequate health insurance to cover medical expenses that you may have to incur. Absence of adequate life coverage can also cause financial ruin for the family should you die while they are still unprepared to face. You can also consider pension schemes to take care of your after retirement years.
It is indeed very important to plan for your post retirement days and buying pension policy along with different affordable insurance products can be one way to make sure that you lead a comfortable life in future too. It is equally important to have an adequate saving. Invest in different schemes so that if one fails, the other will see you through. Neither should you invest directly in stock market unless you are aware about its movement. Invest in well-managed mutual funds instead. Last of all, do not marry in haste. Divorce can ruin you financially.
Therefore ten things you should not do to avoid financial ruin are:
1.Â Â Â In most cases, your expenditure should never exceed your income.
2.Â Â Â Do not take loans without knowing how to repay it within a time limit.
3.Â Â Â Do not use credit cards rampantly
4.Â Â Â If you must take a loan, never let it be so huge that repaying it becomes stressful.
5.Â Â Â Do not fall victim of predatory lending.
6.Â Â Â Do not neglect insurance. Cover your home or your vehicle with adequate insurance policy. Also, buy adequate health insurance to cover medical expenses that you may have to incur.
7.Â Â Â Do not concentrate too much on the present. Make provision for post retirement days too.
8.Â Â Â Do not invest directly in stock market unless you are aware about its movement.
9.Â Â Â Do not keep all the eggs in one basket either. Invest in different schemes so that if one fails, the other will see you through.
10.Â Â Â Divorces can ruin you and so do not marry in haste.