Bankruptcy is the ultimate panacea to all debt woes, whether for a business or an individual. While it provides you immediate relief from harassing creditor calls and the hassles of writing multiple checks to multiple lenders, it also damages your credit score to a great extent. This debt relief option is public and the debtor feels humiliated to be called a bankrupt. Bankruptcy is that B-word which we all know of but we don’t prefer saying it as we all hope that we never have to go through it. The mere thought of filing bankruptcy sends shivers down our spines and makes our bank account quiver in pain and fear. This is in fact the ultimate nadir of personal finance.
According to finance guru Dave Ramsey, this scary debt relief option is often deemed as one of the top 5 negative events which a person can experience. Bankruptcy leaves back deep wounds both mentally and financially in the form of a trashed credit report. According to data from the United States Courts, it was seen that bankruptcies in the US were abundant in 2013 and 2014 with more than 1.2 million filing Chapter 7, 11, 12 and 13 bankruptcies. The reasons for taking resort to this debt relief option were different from one person to the other.
Avert filing premature bankruptcy – Money tips for young entrepreneurs
Starting out young as an entrepreneur is wonderful as you can reap the benefits which the world offers you much earlier. However, it is also true at the same time that being a young entrepreneur can also be disastrous if you don’t take care of your finances. Here are some vital and effective financial tips to take into account.
Be responsible for your own personal finances.
Management of personal finance might seem like an agenda for the adults. But if you take it seriously, you will note that your money and your current state of finance will not only play an important role in your life but they will also influence the course of your coming ventures. You can use personal finance software like Mint or Quicken Online in order to track your income and expenses.
Set realistic financial goals.
Just like you operate your business, you need to set some realistic goals to track your progress and provide motivation to take action. Divide your personal finance goals into short term goals and long term goals. Short term goals will include monthly savings, spending budgets and long term goals might include projection of your personal net worth.
Research on finance and money.
Research on how money should work for you by reading some relevant books and resource websites. This way you will gain basic ideas on how to make the most out of money which you earned and thereby achieve financial success.
Start saving money.
Without saving at least 12-15% of what you earn in a month, you can never move forward with your personal finances. Even if you can’t save the aforementioned amount, you can save a few cents as that too will add up in the long run. If you’ve heard about the proverb that says ‘prepare an umbrella before it rains’, you will know that it is vital to save in order to prepare for financial odds.
So, if you’ve started entrepreneurship at a young age, you should pay extra attention to your personal and business finances so that they don’t go out of control. Follow the above mentioned personal finance tips and avert the risk of filing bankruptcy for the debt that you accumulate.