Lifestyle,  Tech and Finance

5 Tips on how to safeguard yourself against bankruptcy

I’ve declared bankruptcy once. I was young, naive, and too optimistic. Thinking all those credit cards were free money for me to spend until it wasn’t. I had to give up my savings (which I didn’t have), properties, and a massive chunk of my salary to pay my debt off. I don’t want it to happen again, and neither should you. 

As they say, prevention is always better than cure. That’s why I’ve scoured the world wide web for the best tips on how to protect ourselves from bankruptcy.


What is Bankruptcy?

According to Investopedia: Bankruptcy is a legal action in which a person or company cannot repay their existing debts. The bankruptcy procedure begins with a petition filed either by the debtor, which is the most common or by creditors, which is less common. Then, the debtor’s assets are all measured and analyzed. Finally, they may utilize the assets to repay some of the remaining debt.


7 Tips to safeguard yourself against bankruptcy

Beware of thy credit cards.

Using credit cards and failing to pay them off monthly can be damaging to your credit. Aside from the high interest rate, the most significant disadvantages of utilizing credit when you don’t have the means to pay it off later include harmed credit, strained relationships with family and friends, and, eventually, bankruptcy.

Know your cash flow

A personal cash flow statement is essential because it allows you to see where your money is coming from and how it is being spent. You can then use this information to assess how many of your daily expenses you are willing to forego to have more money to invest toward future goals.

Maximize public transport

Having a car sure feels fancy, but can you imagine all the gas, toll, and maintenance fees required to own one? Even hiring an Uber is expensive! I’m not saying you should sacrifice comfort by taking public transport every single day. But find time to squeeze it in your schedule, maybe once or twice a week and imagine the money you’ll save

Stay on budget

Sounds easy, but not really. We go back to tip #1, where we should avoid credit cards. Spend only money you have, not money you “will” have in the future. No one knows what will happen, so it’s better to save for tomorrow than spend for today.

Have an emergency fund

Speaking of saving for tomorrow, having an emergency fund is crucial in anyone’s life. What is an emergency fund? It’s money you can spend on your daily life in case you lose your job. Is your money in your bank account enough in case of that unfortunate event? Of course, we do not wish for it to happen, but if you don’t want to go bankrupt, it’s better to be safe than sorry.



Final words of advice

It’s not always your fault. You may find yourself in a situation where you’ll likely get bankrupt, especially during this time of the pandemic. If ever you do get bankrupt, don’t get dismayed. Consolidate your debt. Ask for help. You can use this period to learn from past mistakes and safeguard yourself in the future (like I did). Set up HUGE funds for emergencies and make sure you don’t spend it on anything unnecessary. 

I have bipolar-1 disorder, and my brain is literally prone to overspending without control. If you think you need psychiatric help, get one. The sooner you do, the sooner you’ll save yourself and save your future. Self-control in spending is the key to success.



  • Hyun Jang Nim

    I like the tips that you have listed. These are really helpful. I agree, sometimes bankruptcy is not our fault. It is better to prevent it while we still can, these lists are a nice guidelines.

  • Rowena Callo Villareno

    I really agree that prevention is better than cure. That’s why its really important to do something to protect us from now that to be sorry later. I really appreciate your effort to scoured the world wide web for the best tips on how to protect ourselves from bankruptcy. I find it really helpful and informative. Thank you so much for sharing these 7 tips to safeguard against bankruptcy.

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