Facing a financial crisis? It's important to make the right moves.
But sometimes what you don't do can be just as critical, says Harvard Law School professor Elizabeth Warren, co-author of "All Your Worth: The Ultimate Lifetime Money Plan." Here are some of her "don'ts" to keep the situation from getting worse as you right yourself financially:
1. Don't borrow more money. Sounds like a no-brainer, right? But in a money crisis, people tend to do the opposite.
"Some people engage in a shell game with themselves," says Warren. "They pay more down to creditors than they really can afford, leaving themselves with no cash." Then they charge current expenses. "They're caught on a treadmill," she says. If you've hit a financial crisis, stop borrowing.
2. Don't cash out your retirement. "There's a reason that money is protected from your creditors," says Warren. "It's there to protect you when you will not be able to provide for yourself."
No matter what you've signed, you shouldn't feel any obligation to use it for debts. "When the creditors made their bargains with you, they never expected to be able to reach your retirement," says Warren. "Don't give it up voluntarily."
POSTED BY: Lee Ruth
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