Guestpost by Monica Clark
According to the U.S. Courts website, the total number of personal bankruptcies in America was a staggering 1,362,847 for the year 2011. As shocking as the statistic is, bankruptcy is not uncommon in today’s economy. What’s more surprising, is the large number of celebrities that have filed for bankruptcy in recent years.
The famous and newsworthy are considered to be so wealthy that they aren’t affected by the same financial struggles that the rest of us have to face. However, they fall into some of the bad habits that we continue to practice as well. Overspending, mismanagement of our money, and no thought to saving for the future are all factors that can lead to bankruptcy.
The Real Housewives are Desperately in Debt
The Bravo franchise of Real Housewives is known for the crazy drama between the characters, but you may not be aware of the fact that nearly a dozen of the cast members have filed for bankruptcy or been in foreclosure! The most famous of these bankruptcies was filed by Teresa Giudice of the New Jersey show. Apparently, she and her husband are reportedly in debt to the tune of $11 million due to their lavish spending on material goods, high credit card bills ($104,000), and poor investment decisions.
Keeping Up with Appearances, Literally
Plastic surgery is so commonplace in today’s society that we don’t think twice about getting it done. However, few of us would consider spending almost $100,000 to have eleven surgeries performed on our bodies in order to change our appearance. Heidi Montag, star of the TV show The Hills, did just that, and it contributed to her enormous debt and subsequent bankruptcy.
Based on Heidi’s assumption of a never ending income, she spent all of her money on wants instead of needs, and failed to plan for the future. Now that she is starting over, a portion of any money that she receives should be allocated to a savings account with ImpulseSave. It’s easy to set up and maintain, and it will last much longer than silicone and Botox.
Save, Don’t Spend
An increasing number of people have fallen on hard times because of an unexpected job loss, underwater mortgage, or credit card debt, but they don’t have access to the kind of funds that a celebrity like Nicolas Cage does.
The very famous star of such movies as National Treasure and Ghost Rider is just as famous for his role as a debtor. Despite having made millions of dollars throughout his career, he apparently spent much of it on exotic purchases such as a prehistoric dinosaur skull, a shrunken head collection, and three castles. In addition, he bought multiple homes, cars, yachts, and a jet. That kind of extravagant spending, and failure to pay $6 million in back taxes to the IRS, forced him to declare bankruptcy.
Spending less and saving for the future is vital if you don’t want to end up broke. And take it from these celebrities: you are never so wealthy that you no longer have to be wise about the way you use your money!