WASHINGTON (3/25/09)--The nation's youngest adults--many of whom admit they wish they'd learned to manage their money before leaving home--are among an increasing number of individuals filing for bankruptcy in these tough economic times.
During 2008, bankruptcy filings in U.S. courts increased 30% over fiscal year 2007 (uscourts.gov March 17). Compared with the same period in 2008, bankruptcy filings have increased 33% in the first quarter of fiscal year 2009 (uscourts.gov March 5). And despite bankruptcy filings by adults of all ages, more than 25% of filers since 1991 are between ages 18 and 34, according to the report, "Generations of Struggle" (AARP June 2008).
Take steps to get your spending under control and avoid bankruptcy:
Chop credit card spending. Stop using credit cards until your finances are back on track. Pay with cash or a debit/check card. Keep track of what you spend--particularly with debit purchases--by writing down the amounts or keeping receipts. That way you won't withdraw more money than you have in your account.
Trim unnecessary "wants." Identify monthly expenses that aren't necessary for survival and eliminate them or cut back. For example, replace going out to dinner with renting a movie, cancel some magazine subscriptions, and consider downgrading or cancelling cable TV.
Snip variable expenses. Find ways to cut back on necessary expenses. Unplug electronics when not in use, turn off lights when you leave the room, keep your thermostat at or below 68 degrees, combine trips to save on gasoline, and buy generic items instead of brand name goods at the grocery store. Find more energy-saving ideas at the Department of Energy's Energy Savers Web site: eere.energy.gov/consumer/tips/.
For more information, read "Tough Times Series: When Times Are Tough We Can Help" in Home & Family Finance Resource Center
courtesy of cuna.org