I have interviewed thousands of bankrupt debtors, trying to learn from their mistakes and insights, to help me “connect the financial dots,” not only for high school and college students in the CARE Program, but also for adults.
Since they represented every possible demographic — age, race, sex, creed, geographic area, and education and income levels — I asked many of them what they had learned from “ being there and doing that,” and what their advice was for others.
Here is some of their best advice:
1. Learn to say “no” sometimes to your children and grandchildren. They will grow up just fine if they don’t have absolutely everything some other child has, or what they see marketed on television. Turns out the Rolling Stones are right, “you can’t always get what you want.”
2. Don’t go into debt for home improvements, upgrading your appliances or redecorating. Save for them first. Remember, “if it isn’t broke, don’t fix it,” unless you can pay for it up front.
3. Learn to take advantage of free or low-cost personal and family activities. Why not wait a month to see that movie at a discount theater?
4. Learn to say “no” to friends and family who need financial help, if you have to go into debt to help them, especially if it’s debt you can’t afford to repay. It may be hard, but if you get into financial trouble helping them, who is going to be there to help you?
5. Pay attention to your personal finances. Good financial habits and practices don’t just happen. You have to learn about them, and then approach your finances like you do your job, with focus and determination. It can’t be an excuse that you were not taught about personal finances or had a family who set a poor example.
6. If you are a young couple, don’t buy a new house or have children unless you have thought about all of the expenses that you will incur, and you have a realistic plan for how you will pay for them without going into credit card or other unsecured debt. Also, don’t forget that many of those expenses may go up over time, but your salaries may not.
7. No matter how you have handled you finances in the past, take the steps necessary to make sure that your children learn about personal finances, especially saving and delayed gratification.
— John Ninfo is a retired U.S. Bankruptcy Judge and the founder of the National Credit Abuse Resistance Education Program. To suggest topics, email him at firstname.lastname@example.org.