Bankruptcy is a terrible and surely avoided as much as possible. The causes of bankruptcy vary. If fail to identify the cause, then get ready to wrestle with financial problems
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- Bad debt management**
Got management in matters of debt alone is not enough. Moreover, there must be good debt management.
Some people take the choice of debt for the sake of necessity. Debt is not a bad choice. In contrast to debt without a mature plan to pay it off.
Before we owe, first calculate our financial ability to determine how much a loan can be made and how long the repayment period will be. Generally, monthly debt installments can not be more than 30 percent income.
For example total salary Rp 10 million, the recommended installment is Rp 3 million per month. If more than that, there is a risk of default that can result in a bankruptcy.
In addition, there must be priority debt repayment if there are some installments. Pay off the biggest interest and deadline. If there is sustenance, prioritize to pay the debt rather than happy.
2. Consumptive lifestyle
Many bankruptcies begin with a consumptive lifestyle. As the shopping process becomes easier, consumer temptation gets bigger.
To overcome that temptation, we must instill the principle of need above desire. Fill the needs first, then think of desire.
For example have to pay credit card bills, but there is a phone latest output. People who have a consumptive lifestyle would choose to delay paying bills, or at least pay a minimum nominal, then credit the phone.
This is dangerous, especially if you still have a good phone. Unconsciously, we are digging the grave ourselves if we put our desires above all else.
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- Do not have an emergency fund**
Life sometimes does not fit into the plan, including in financial terms. That's why emergency funds are very useful in order to prevent bankruptcy.
Emergency funds are money that is set aside from income each month until it is considered as a reserve fund if something happens that requires large funds. For example, sudden termination of employment due to a crisis in the company.
There may be severance pay, but emergency funds are still needed because they no longer receive monthly salary.
In general, for singles, a total emergency fund is recommended at 5-7 times the income per month. As for the already married, at least eight times the income per month.
4. Have no protection (insurance).
Similar to emergency funds, insurance protection is needed to deal with the threat of bankruptcy. Insurance itself is divided into several kinds according to its usefulness.
We just see which one fits most with the risks we bear. For heads of families with unemployed wives, for example, life insurance can be considered for anticipation in the event that it makes it impossible to make a living.
Insurance funds can be exploited when it happens. From the office there may be insurance, but usually the protection is limited. Fortunately the benefits of private insurance can be combined with BPJS Health.
5. Working potluck
Bankruptcy does not always mean a person falling into a deep hole in debt suddenly. When people work as hard as his career alias stuck, meaning that his income will also not change.
As a result, the bankruptcy will be greeted because the cost of living is higher not aligned with the salary received. The ends owe to outsmart the deficit.
Initially the problem may seem resolved. Though the time bomb is being planted and keep ticking until the time explodes. Debt will continue to bloom until we can not afford it.