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Spending above one’s means spells big trouble

On Behalf of | May 19, 2016 | Personal Bankruptcy

Celebrity is easy to come by these days, and as a society we are inundated with images and stories of how famous people spend their time and their money. Add to that the temptation to covet the things friends and family members possess, and the potential to incur unnecessary debt looms large. That is especially troubling considering more than two-thirds of people are already in debt according to NBC News. However, when it comes to paying off that debt, 30 percent of borrowers have no plan on how to do so.

Surprisingly, having existing debt does not seem to be much of a deterrent. One study found that many people are willing to take on more debt in order to give the impression that their lives are more glamorous than they really are. In fact, the more money someone makes, the more they are willing to spend to that end.

Even celebrities are not immune to that way of thinking themselves, reports MainStreet. Shockingly, nearly two years after retirement only 20 percent of NFL players have any substantial savings left, and within five years of ending their careers, 60 percent of professional basketball players have no money left.

In order to combat that way of thinking, people need to let go of other people’s opinions and focus on what kind of lifestyle works for them, experts recommend. If not having the latest model cellphone or the super expensive trendy shoes means having enough money for retirement or an emergency savings fund, people should seriously consider making those sacrifices. A good way for people to know where their personal finances stand is to use accounting software such as Quicken to keep track of their income and expenses. Seeing numbers on paper will likely make it less tempting to blow thousands of dollars on a vacation or a fancy car. It may be difficult, but resisting the urge to keep up with the Joneses now will pay big dividends later on.


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