Celebrities Experience Financial Woes Too

Being a celebrity means being famous, glamorous, and, it would seem, having more money than one person could possibly spend in a lifetime. Somehow, though, there are always a few celebrities who manage to blow through all their dough or commit other grave financial errors. Some have even ended up bankrupt. Here, we’ll recap some of the biggest celebrity blunders...and discuss how you can avoid making the same mistakes.

Marlee Matlin

Marlee Matlin may be an Academy Award winning actress, but she’s also pretty forgetful. She

“forgot” to pay her taxes and ended up owing the IRS about $50,000.

As a bonus, we also have to mention Wesley Snipes, another oh-so-forgetful actor. His tax evasion crimes were so serious that he spent three years in prison for his so-called memory lapse.

Obviously, the takeaway is to always pay your taxes- you just can’t cheat Uncle Sam. Even if you can for a while, it will eventually catch up to you. If you don’t think you can manage your taxes and the ever-changing tax laws on your own, hire a professional to do it for you.

M.C. Hammer

A famous musician filing for bankruptcy isn’t something that happens every day. That’s probably why it made headlines back in the 90s. The famed musician reportedly blew through more than $33 million in a year. He bought a huge staff to tend to his every need, a literal mansion, a stable (yes, a stable), and then faced a bunch of lawsuits for copyright infringement.

The moral of this story- other than being original with your songs- is not to be a big spender. Just because you’re making more than you ever have before or you get a nice nest egg doesn’t mean you should spend it all. Save, invest, and find a trustworthy financial advisor to help you make smart choices.

Teresa Giudice

Our final “financial failure” is Teresa Giudice, who rose to fame on the reality show The Real Housewives of New Jersey. Giudice ended up going to prison for false loan applications for mortgages that she signed.

If she’s to be believed, she had no clue what she was signing. She simply trusted her husband’s judgment and signed what he handed her without reading it. The rule is to always read and understand what you’re signing; for best results, have a financial advisor and/or an attorney look over any legal documents. And always be careful about whom you trust when it comes to your finances and your good name.

If rich celebrities can make such big mistakes, then certainly you can too. However, you don’t have to. Not if you learn from their errors and exercise caution and good judgment in your own financial life.

Wednesday, July 8, 2015