Here’s how to take control of your money in 2022


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Once you start hemorrhaging money, it can be challenging to get your finances back in order. What once seemed like a controllable problem starts to feel like a helpless one. It becomes difficult to get ahead, and you may even feel like it’s too late. But there are steps that can help turn things around, so don’t give up just yet!


The bad news is that there are several behaviors that can cause you to lose money. The good news is that there are proven money habits to get back on track.


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Let’s go over why hemorrhaging money starts and how to get it to stop.

What Does “Hemorrhaging Money” Mean?

People most commonly use the word “hemorrhaging” to describe blood released from a broken blood vessel. Hemorrhaging money means you’re losing substantial amounts of money or “bleeding” money.


Nobody wants to be overspending and hemorrhaging money. This can happen when buying a new car, going out too much or spending on projects that don’t make money. Fortunately, you can quit hemorrhaging money by applying the powerful wealth building habits discussed in more detail below.

SPONSORED: Find a Qualified Financial Advisor

1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

What Causes You to Lose Money?

The main cause of hemorrhaging money is a set of bad financial habits. These bad money habits all have one thing in common: ignoring the true costs of something. For example, when you overspend on a new car and don’t account for monthly payments, taxes or any repairs, this will cause you to hemorrhage money because you forgot about those hidden expenses.


It might be an east thing to overlook, but it can cost you dearly in the long run. Sometimes, consumers are well aware they spend money faster than they make it, but still can’t seem to stop. Others can’t figure out where their money goes and always feel as if they never have enough for the basics. Still others get hit with unexpected emergencies they don’t have enough money to cover.


The following list of money maladies, in isolation or aggregate, usually cause ongoing money hemorrhaging. Learn to identify them and then apply the information covered in the following section to stop.

1. Lifestyle Inflation

Have you ever gotten a pay raise but felt like you couldn’t afford anything more than you did before the raise?


Lifestyle inflation, sometimes referred to as lifestyle creep, is when you gradually increase your spending and former luxuries become considered necessities. Usually, lifestyle inflation happens when your income rises over time and your spending rises at about the same rate.


After a raise, you might move into a larger apartment, start buying more expensive food or decide you need to start dressing more expensively for your new role. The problem is that people who increase spending at too high of a rate diminish their chances of reaching financial independence and other money-related goals. No matter how much money they make, some people still always feel broke.


By learning to delay gratification, there might be a list of things to save up for that motivate you to work toward a goal but defer spending until you’ve earned it. Delayed gratification is actually an effective strategy for improving your finances, even if you feel like every penny is needed now.

2. Keeping Up with the Joneses

Younger generations can equate “keeping up with the Joneses” with “keeping up with the Kardashians.”


The basic idea of financially “keeping up” with others is that people want to appear as if they have as much money as their peers or even more. Someone may see a wealthy neighbor mowing his lawn with a new lawnmower and buy the same one, even if they can’t afford to without getting credit card debt.


A teenager may spend her allowance on expensive clothing brands to impress her friends and have nothing left over to put toward college. Keeping up with the Joneses is a surefire way to hemorrhage money.


People may also hemorrhage money by not being careful with their credit card use and spending more than they can afford to pay off each month. They can also carry a balance on a credit card for months without paying anything extra towards it. This is dangerous because the interest rates are so high that you could end up in debt and unable to climb out.

3. Lacking Better Wealth Building Habits

Sometimes, money starts hemorrhaging even if a person isn’t increasing recreational spending or buying luxuries for appearances. Everyone needs basic financial literacy and constructive money habits. For example, a family may be paying all of their bills on time and feel financially stable, but they don’t have an emergency fund.


A medical emergency or natural disaster may strike and the family uses credit cards to pay the expenses because they don’t have enough to pay them outright. The credit cards charge high interest rates and now the family gets deeper into debt without any idea of how to climb out of it.


If the family had included contributing to an emergency fund in the budget, the high-interest credit cards might have been avoided. People hemorrhage money when they don’t have good habits around finances.


The most common problem, aside from not being able to save for emergencies, is not being able or knowing to save for retirement. It doesn’t just come from overspending on nonessential things like vacations and clothes. By setting and prioritizing your financial goals, you can begin to make progress toward ending the financial hemorrhaging.

How Do You Stop Hemorrhaging Money?

Preventing money hemorrhaging is preferable to fixing it later. Ideally, it would feel simple to live within one’s means and always have ample savings. However, this takes budgeting, impulse control, savings plans and goal setting. When done properly, it can allow you to live like no one else.


All of these are accomplishable and shouldn’t be seen as impossible feats. Consider each one of these items below for how to control your money and leverage useful skills, money apps and more to put your finances on the right track.

1. Budget & Manage Your Spending

If you’re hemorrhaging money, it’s essential to create a budget or adjust your current one because something clearly isn’t working.

Step 1: Tally your expenses.

Make a list of all the expenses you have had in the last six months and break them into different categories. You may be surprised to find you spend more in some categories than you realized.

Step 2: Calculate your income.

Determine your take-home pay (what you receive after taxes) and subtract your expenses. Since you’re losing money, this is likely a negative number.

Step 3: Cut expenses where you can and increase your income.

Look at where you can cut expenses and set more strict spending guidelines. As discussed previously, your budget should also include savings plans. Make setting money aside a priority. Hand and hand with budgeting is managing your spending.


Could you save money by packing lunch instead of eating out every day? Are you paying subscriptions for streaming services you rarely use?


If there is absolutely no excess money being spent after essentials, you may need to increase your funds or cut down on expenses in more drastic ways. This might mean asking for a raise, looking for freelance work, starting a side hustle to make money while you sleep or moving into a smaller home. Sometimes, cutting expenses requires thinking outside the box and reevaluating your current living situation.

2. Use Cash or Tightly Control Your Credit

It’s much easier to spend money with a credit card than cash, so consider using cash or debit cards for more purchases. When you buy with cash, you can only spend as much money as you have with you, limiting your ability to overspend. The logic appears sound: if you only use cash, you can’t spend what you don’t have.


It’s easy not to notice how a bunch of small credit card purchases add up. Either just use cash or tightly control your credit.

3. Automate Your Savings

Don’t wait to see what money is left over at the end of each month and then move some to savings. You need to pay yourself first by automatically routing funds into a savings or investment account.


M1 Finance’s all-in-one money automation system can help you to set financial goals and automate them into reality. M1 Finance allows you to make automatic money transfers on a schedule, for free. M1 takes this to a whole new level with their Smart Transfers. M1 Plus members can set threshold-based rules. For instance, some members determine how much they need in an M1 Spend Plus checking account every month for recurring expenses. Then, they have a Smart Transfer rule set up that makes sure the minimum balance always remains.


It invests this money or sets aside the rest before you have a chance to spend it on non-essentials. The stock app allows you to have multiple “investment pies” to send your money, such as one for an emergency fund, one for a home down payment and one for retirement.


Also, learn how to get free stocks for signing up to your account. This can make getting started even easier.

4.  Set Goals for Yourself

Set financial goals to keep yourself motivated. Rather than vague goals, you want Specific, Measurable, Achievable, Relevant and Time-based (SMART) goals. For example, you may have a goal to pay off all of your credit card debt by a specific, manageable date. Share your goals with someone you admire as motivation and to hold yourself accountable.


You may also want to set numerical goals. For example, you may have a goal of saving $400 per month from your paycheck for the next six months. This will get you closer and closer to your goal of having enough saved up for that vacation or other big purchase. Be sure not to spend money on anything but necessities during the saving period.


You may want to take this a level deeper and set a goal for how much you would like to save each day. For example, if your bi-weekly paycheck is $1,000 and you have goals of saving 20% or more of your paycheck, you may want to set your goal of saving about $15 per day. That would get you closer and closer to the monthly savings that you are looking for while also making it more manageable on a daily basis.


You can stop hemorrhaging money by setting specific goals with deadlines in mind or an overall percentage saved each month. By setting and holding yourself to SMART goals, you make the likelihood of financial success high.


Related: Success is the best revenge

How to Stop Hemorrhaging Money and Get Back On Track

If you find yourself hemorrhaging money, carefully look over your finances. Where is the money going? Reevaluate your budget, use automation services to your advantage and set strategic financial goals. For medical emergencies or natural disasters, look into services that can help. Avoid loan sharks and any other quick fixes that may actually cause you to lose even more money.


Hemorrhaging money may feel like a prison, but there are ways to make it to financial freedom.



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When you die, what happens to your debt?


Do you know what will happen to your debt when you die? Some debts are forgiven while others may be passed down to heirs. Read on for the answers to some of the most frequently asked questions related to death and debt.


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In order to accurately answer this question, we need to examine the most common types of debt people accumulate. In other words: Not all debt is equal. The type of debt you have and when you accumulated the debt will determine how and if your debt is passed on to others when you die.

The Most Common Types Of Debt


If you die with credit card debt, there are two things that may happen:

  1. Your debt may be forgiven and written off by the credit card company
  2. The debt will be passed on and the responsibility of a survivor


If you are the sole owner of the debt when you die, (not married or a cosigner) the credit card companies will be involved in the probate process. The money left in your estate, any retirement accounts, or other items worth money will be sold and the outstanding debts will be paid.

If there is not enough money in your estate to pay off the remaining credit card balance, your children or beneficiaries will not be required to pay the remaining balance. The outstanding debt will be “forgiven” by the credit card company.


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If the credit card is a joint account with a living spouse or a cosigner, the other account holder will be responsible for the debt. If you have authorized users on the account but they are not the account owner, the users will not be responsible for the debt.


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This is one of those myths that continues to live on. Credit card debt does not go away after seven years. The confusion with the seven-year time frame comes from the credit report time requirement.

After seven years, old debts begin to fall off of your credit report. Your debt, however, is still very much alive and owed. Lenders can and will continue to pursue the amount owed until it is paid, settled, or charged off. Do not be fooled into thinking your credit card debt will go away after seven years.


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The quick answer? It depends. There are several factors that determine if a deceased spouse’s credit card debt will be passed along to the surviving spouse. If the credit card debt was incurred before marriage and the deceased spouse was the sole owner of the account, in most cases, the debt will not be the responsibility of the surviving spouse.

If the credit card debt was incurred after marriage and the deceased spouse was the sole owner of the account, the state you live in determines the surviving spouse’s responsibility. If you live in one of these community property states and the debt was incurred after marriage, the surviving spouse is responsible for the credit card debt of their spouse regardless of the account ownership:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

If you do not live in one of these states, generally the surviving spouse will not be responsible for the credit card debt if they were not a joint owner of the account. If you are a joint owner on the account, you are now solely responsible for the debt.


Again, where you live determines what can happen to your medical bills when you die. Generally speaking, children and heirs will not be required to pay back the outstanding medical bills of their parents. With that being said, there are a couple of instances where a child could be responsible for the medical debt of their parents.


When a child cosigns admission paperwork acknowledging financial responsibility if the adult is unable to pay their bills, this debt may be passed down to the child.


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There are 26 states that have filial responsibility laws that state a child may be responsible for a deceased parent’s medical debt in certain situations. The states that have filial responsibility laws are:

  • Alaska
  • Kentucky
  • New Jersey
  • Tennessee
  • Arkansas
  • Louisiana
  • North Carolina
  • Utah
  • Indiana
  • Nevada
  • California
  • Maryland
  • North Dakota
  • Vermont
  • Connecticut
  • Massachusetts
  • Ohio
  • Virginia
  • Iowa
  • New Hampshire
  • Delaware
  • Mississippi
  • Oregon
  • West Virginia
  • Georgia
  • Montana
  • Pennsylvania
  • South Dakota
  • Rhode Island

Now, before you become overly concerned about living in one of these states, understand that the enforcement of filial responsibility laws is extremely rare. If you have significant medical debt, consult with an attorney in your state to see exactly what responsibility your adult children may be required to pay back.


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Student loan debt may or may not be passed on to survivors when the borrower dies. What happens to the loan depends on what type of loan was taken out and when it was established.


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If you have federal student loans, they will be forgiven upon death. Federal student loans do not pass on to others as long as a death certificate is presented to the lender. Federal student loans that fall into this category are:

  • Direct Subsidized Loans
  • Direct Consolidation Loans
  • Direct Unsubsidized Loans
  • Federal Perkins Loans


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On Nov. 20, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act was amended. The added section releases cosigners of a private student loan from financial responsibility if the primary borrower dies. Due to this, all new private student loans with cosigners are not required to repay the loan upon the student’s death.

However, student loans with cosigners taken out before Nov. 20, 2018, may still require the cosigner to be held responsible for the debt.




Federal Direct PLUS Loans are also forgiven upon the student’s death. In the past, the parent who signed for the PLUS loan was required to bear the burden of the tax responsibility and file the forgiveness as “income” after a child’s death.

Currently, The Tax Cuts and Jobs Act of 2017, is in effect and releases parents from this tax responsibility. This tax stipulation remains in effect until the year 2025.


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There is several different scenarios involving vehicle loan debt upon the borrower’s death. If the auto loan has a cosigner or the vehicle was purchased in a community property state after a couple was married, the cosigner or spouse is responsible to repay the auto loan.

If the loan was obtained before marriage and is only in the deceased spouse’s name, generally the surviving spouse is not held responsible for the debt. The bank will take possession of the vehicle to settle the outstanding debt or the surviving spouse can pay off the vehicle loan.

If the borrower is not married, the survivors can either pay off the vehicle loan and keep the vehicle, sell the vehicle and pay off the loan or return the vehicle to the bank. Heirs do not inherit vehicle loan debt.


Payday loan debt is very similar to credit card debt when you die. If there was not a cosigner or someone else listed as jointly responsible for the loan, then the company writes off the debt as a loss. Payday loan debt is not transferred to heirs but may be the responsibility of a surviving spouse if the debt was incurred after marriage in a community property state.


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In probate, the home must be paid off with the funds from the estate or the mortgage company must agree to let someone else inherit the loan. If you still owe money on your home, your spouse or heirs usually have three separate options:

Option 1: Sell the home to pay off the outstanding mortgage. The executor of the will can initiate a home sale to fulfill the outstanding debt obligations. If the home is not worth what is owed, additional money from the estate will be used to pay off the mortgage. If additional money is still required, the bank can take possession of the property.

Option 2: If there is enough money in your estate, your heirs can use that money to pay off the mortgage. Or the beneficiaries can use their own money to pay off the loan in full.

Option 3: If there is not enough money in the estate to pay off the loan, an heir may elect to contact the lender in an attempt to take over the loan. The loan would need to be transferred into the new borrower’s name which would require the heir to meet the credit obligations for a loan.


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Lenders can force the sale of a property to fulfill the outstanding equity loan balance if the estate does not have enough capital to pay it off. This is another scenario where the heir may be able to apply with the lender to take over the payments.





If you have federal tax debt when you die, the IRS gets the first chance at your estate. Legally, the executor of the state is unable to pay any other debt or obligation until the federal tax debt is settled.

If a substantial amount is owed, the IRS will quickly put a lien on any property owned by the deceased in an attempt to satisfy the debt. The federal government will get their money one way or another – but the heirs will not personally be liable for the outstanding tax debt.


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There is not an automatic notification process when a person dies. The next of kin or executor of the state is required to contact the bank and provide a copy of the descendant’s death certificate.

When the death certificate is presented, the financial institution will freeze all of the associated accounts until the probate process is completed. If money is not owed to other lenders, the beneficiaries will be given access to any monies left in the deceased person’s accounts.


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Even though most debts will not be passed on to your heirs when you die, you may not want them to deal with the hassle of paying off all your debt with your estate – only to be left with nothing.

If you have struggled with debt your entire life, a cheap term life insurance policy may be an option to leave a small inheritance to your heirs. Most life insurance policies are dispersed tax-free and are not accessible to creditors.




Leaving debt behind is a fear many seniors face. On the bright side, your heirs will usually not be personally responsible for paying off your outstanding debts. However, the sooner you can clean up your own financial mess, the better.

Do your best to start paying off your debt so your executor is not faced with a long probate process. If you need help getting started, check out this related post The Debt Payoff Playbook.

This article originally appeared on Arrest Your Debt and was syndicated by


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