How can it even be possible that a person who earned hundreds of millions of dollars during their career could end up under a mountain of debt? Well now that the news coverage over the grieving of Michael Jackson’s death has partially subsided, his enormous debt is starting to make the news. And some of the numbers being thrown around for this debt have been as high as $500 million dollars! So how did this all happen? Did he get really lousy budgeting advice? Or was it his copious lifestyle that was to blame?

Michael Jackson’s adult life could probably be summed up in two words: excessively lavish. So what kinds of things did he buy? Perhaps the easy way to answer that would be by asking what he didn’t buy! While we would all love to have our own private amusement park, Jackson actually did. And his sprawling home at Neverland Ranch was chock full of rare antiques. At one point he was even rumored to have owned the skeleton of Joseph Merrick otherwise known as the Elephant Man. This was a man who had no problem spending 40 or 50 million dollars in the span of just one year. That would be like spending $137,000 every single day for a year!

After his albums stopped selling like hot cakes in the late 80’s Jackson’s income dwindled. Fortunately for Jackson there were assets that he could still rely on. Where normal people would need to explore debt settlement options, Jackson instead used investments he had made as a means of leveraging. This put more cash in his hands. And as always the cash would not stay in his hands but instead would get spent supporting his lavish life style and spending sprees. The mountain of debt continued to grow until his death.

So what can we learn from this? Well for one thing, we should all keep our spending habits in check. This is as important as ever right now too because of our economic situation. It is always a good idea to have a plan, and manage your money properly. And a financial plan starts with having a budget. If you have not budgeted for something, don’t buy it! If you control your spending habits, your savings will take care of themselves.