During his life, Michael Jackson sold hundreds of millions of records. His musical legacy should easily have led him to amass one of the greatest fortunes in show-business history. But instead, a history of bad management, excessive personal spending, and big legal bills left him almost broke.

Jackson’s financial problem stems from the fact he continued to spend tens of millions of dollars a year even as his musical output—and his income—slowed down.  In recent years Jackson financed his personal debts by borrowing against assets, and by some estimates his total borrowings at his death may have exceeded $400 million.

His death parallels that of Elvis Presley, who died in 1977 at age 42. Like Jackson, at the end of his life, Presley hadn’t had a hit album in years. He was mostly relying on royalties from his past hits and doing shows in Las Vegas. But in death he became a moneymaking phenomenon.

Might not be a bad time to become a Michael Jackson impersonator.

College may be fun and exciting, but it’s actually an environment where money-management often becomes an issue. Knowing how to avoid these problems is the key to beating them.

Credit cards and loans are just two tempting sources of money. Loans and any form of credit is never free money. In fact, credit is the most expensive form of money in the world. You’re buying money with interest- that’s what it really is. The point here is that a person can only begin to gain and accumulate wealth when the debts have been repaid. 

Often, students get into debt because of the “credit card trap”. The enticing idea of being able to buy things ahead of the actual cash is very tempting. 

Some even fall into the trap of signing up for many credit cards, maxing out each credit card as they wade through shopping malls and online emporia of mostly useless stuff. Some forget that the bills will still come, and debt is attached permanently to their names even after a Chapter 7 or Chapter 13 bankruptcy. 

For young folks who are not earning money yet, or are only earning enough to feed themselves, a rule of thumb regarding credit should be remembered: if it takes more than three months to pay off the credit, it’s unaffordable. This kind of thinking will save you from being buried in debt.

Some recent college graduates are contemplating bankruptcy today, because of mismanagement of finances. But the battle against debt doesn’t have to end that way at all. You can try student debt consolidation to make repayment of debts easier. 

Student debt consolidation is one way of avoiding serious consequences of prolonged debt. Lenders can offer a lower interest rate. If you are able to repay ahead of time, you will save money. Pay the minimum until you get a higher paying job, then start paying off large chunks of the debt to finish with the debt quickly.

It’s important to understand how you can use your credit card so it works to your advantage, not against you.

Credit cards have several pluses. A credit card can: be more convenient to carry than cash; offer free use of funds, provided you always pay your balance in full, on time; help you establish a good credit history; provide a convenient payment method for purchases made on the Internet and over the telephone; and give you incentives, such as reward points, that you can redeem.

On the other hand, credit cards have their minuses. They can: allow you to build up more debt than you can handle; cost much more than other forms of credit, such as a line of credit or a personal loan, if you don’t pay on time; damage your credit rating if your payments are late;  and they have complicated terms and conditions.

A credit card is more then a simple piece of plastic, it is first and foremost a flexible payment tool accepted at millions of locations worldwide, and if the balance is paid off every month, then no interest is charged on purchases made so, essentially, short-term credit is granted without the consumer paying any interest. Before you decide to use your credit card, carefully consider all of the factors and weigh them against your personal needs and values.

There are ways to use credit cards responsibly. Use a low or no-fee credit card and save on the annual fee that some companies charge. Only charge to your credit cards what you can pay off in full when the bill comes, you might not use your credit card as much if you start believing that you have to pay off your entire balance at the end of each month. Also, if you make only the minimum monthly repayment you may never get out of debt.

Handling money and credit cards wisely is a talent few of us are born with. But it is a skill that can easily be learned. The place to start is with budgeting. A budget is simply an organized way of managing your finances. It gives you an overall picture of where your money is coming from, when it’s coming in and how it’s being spent. A budget should be flexible, changing according to your circumstances. 

Budgeting helps us achieve short-term goals like paying the monthly bills on time; it’s also for longer-term financial goals like buying a home, a car, paying for an education, a wedding or a vacation. When you take control of your financial affairs, you’re more confident about the future. A budget is key to financial control. It gives you a “snap shot” of where you stand financially and where you’re heading.

The main advantage of having a credit card is convenience but if you’re not good at budgeting and managing your finances, the over-use of credit cards can leave you with a debt that’s very difficult to pay back.

Executing a durable power of attorney for financial management should be done prior to incapacity. Waiting until you become unable to coherently express your wishes with regards to financial management decisions is too late, and a court-appointed conservatorship may become necessary. Since the principal does not die at incapacity, only an attorney designated under a properly executed power of attorney may step in to make financial management decisions. A last-minute durable power of attorney executed during incapacity would not survive a court challenge. Results could be expensive or damaging.

Consider executing an immediately effective Durable Power of Attorney, which gives an attorney the power to make decisions on behalf of the principal without any finding of incapacity. Otherwise, your Power of Attorney would only go into effect upon your incapacity. Since incapacity is determined according to a test set out in the power (such as a determination made by a medical doctor or a court rendered decision), this would eliminate the expense, difficulty, and uncertainty of initiating a legal procedure to determine incapacity. 

If this makes you wary, simple measures can be taken to avoid disasters before incapacity. You could seal a copy of the durable power of attorney in an envelope labeled “do not open until my incapacity.” In addition to oral instructions, this can help to avoid the scenario of a run-away attorney in fact who uses the power of attorney to access financial accounts before incapacity.

When considering what powers to give your Durable Power of Attorney, examine your desires and the particular concerns that stem from the types of assets you hold. The Durable Power of Attorney should be coordinated with the will, trust and advance health care directive to ensure that they do not contradict each other.

Before executing a power of attorney, individuals should be fully informed of the powers that they are granting, and the possible consequences of such sweeping grants of power. In all cases, it’s best to consult with an attorney who can advise on specific risks.

Unlike a will or trust, which mostly deals with decisions that are made upon one’s death, the Durable Power of Attorney deals with life-time financial management and estate planning questions. Individuals should be aware of the risk in waiting to execute the power of attorney; the range of powers that can be given to the attorney in fact; and the risks associated with a sweeping grant of authority to the attorney.