5 Money Tips That Could Save You From Ever Going Broke
A common concern for many Americans is that they will eventually go broke. Whether they are just starting out or nearing retirement, the fear of running out of money can loom large.
Read More: I’m a Financial Advisor: My Wealthiest Clients All Do These 3 Things
Find Out: How Much Money Is Needed To Be Considered Middle Class in Your State?
While there are no 100% sure-fire ways to ensure a stable financial future, there are some tried-and-true tips that can help prevent economic despair.
Here are five steps that may save you from going broke in the future.
Set a Budget
Almost all money experts agree that setting a budget is critical to ensuring long-term financial stability. Taking time to write down any money that is coming in and any money that is going out is a game-changer.
According to the experts at the consumer credit reporting company Experian, setting a budget is crucial because it enables individuals to avoid overspending, bring financial goals within reach, prevent or overcome debt, and prepare for emergencies.
Discover Next: 5 Ways ‘Loud Budgeting’ Can Make You Richer, According to Vivian Tu
Build an Emergency Fund
Another way to help keep money in the bank (or in the freezer) is by building an emergency fund. For beginners, Fidelity recommends starting by trying to save $1,000. The investment company then suggests building the fund to cover three to six months of expenses.
A 2025 U.S. World News & Report survey revealed that 42% of Americans do not have an emergency savings fund and that 40% would be unable to cover an emergency expense of $1,000 if it came up. This means that unexpected car repairs or a pricey medical bill could result in financial ruin for a large portion of people. Starting small by automating a portion of each paycheck towards savings can help to ensure that surprises aren’t as shocking.
Pay Off High-Interest Credit Cards
While credit cards are convenient, they can also spell out big problems if they aren’t paid off. As reported by the Federal Reserve Bank of New York, credit cards are the primary source of unsecured borrowing, and 60% of borrowers carry a balance month over month. On average, these cards carried an annual interest rate of 23%.
Making only minimum payments on these cards generally means that it will take years before the debt is paid off. Prioritizing the payment of cards with the highest interest rates first is considered a sound strategy for achieving long-term financial stability. As cards are paid off, the money saved can then be used to pay off lower-interest cards or other debt, before eventually being used for savings.
Content Original Link:
" target="_blank">
