Photo: scui3asteveo

US Magazine reports that Bruce Jenner and Kris Kardashian don’t mind if their two young daughters Kendall and Kylie Jenner skip college, given the success of the girls’ modeling careers and teen fashion lines.

High-visibility careers like modeling might be attractive in the present, but fame can be a fickle thing. Hitting the books is a long-run investment that’s been proven to pay off: Studies show college graduates make far more than those who only hold high school degrees.

In fact, the older Kardashian girls might have avoided several embarrassing financial flubs had they taken a few more finance courses:

• In 2008, the older Kardashian sisters were sued for charging more than $120,000 in unauthorized purchases on an American Express card that was owned by R&B singer Brandy’s mother.
• In a 2009 episode of Keeping Up With the Kardashians an intervention was staged by the family to address Kim’s shopping addiction.
• In 2010, rumors that Kourtney might file for bankruptcy due to spending millions on clothes, cars, and luxury apartments made the news
• The short lived Kardashian Kard, a prepaid debit Mastercard marketed at teens, marked another financial blunder. The card was pulled after parents argued the $99.95 annual fee and access to plastic would lead to irresponsible financial decisions.

Image: TaxBrackets.org

Lindsay Lohan might have received an “A” for behavior on her recent progress report, but she gets an “F” in financial literacy. The former child-star owes nearly $94,000 in back taxes from 2009. MSNBC reported that on Jan. 5 the Internal Revenue Service filed a notice of a Federal Tax Lien against Lohan.

The lien is against Lohan’s Encino home for a whopping $93,701.57, and this isn’t the first time the 25-year-old has made a major financial flub. Previously it was reported that Lindsay racked up $600,000 in credit card debt. Another report claimed she was nearly evicted from her apartment for falling behind on her rent.

If you can’t pay the bill, don’t make the purchase.

Comeback role as Elizabeth Taylor on Lifetime aside, it’s time for Lohan to read up and improve her financial literacy. We’ll help her out:

• Always pay your taxes. And pay them on time!
• Have someone check your return to make sure you’ve paid the proper amount.
• Have a liquid emergency fund (not to be used for shopping sprees or late night partying).
• If you want to live like an A-lister, it helps to be an A-lister. Stop trying to keep up with the Joneses.

Check out why so many celebrities make financial flubs here.

TheBigLead.com

Broke professional sports stars are nothing new, but ever wonder why athletes — with their outsize salaries — seem so much more prone to bankruptcy than Average Joes?

The New York Times took a shot at answering that question in a recent “Your Money” column by interviewing Hall of Fame quarterback Steve Young:

Steve Young has done pretty well for himself. He laid the groundwork for fiscal sanity by majoring in finance at Brigham Young University, won the most valuable player award after leading the San Francisco 49ers to victory in Super Bowl XXIX and is now a managing director at Huntsman Gay Global Capital, a private equity firm.

So how well did he do with his money when he started his professional career? “I wasn’t ready to deal with it,” he said. “Just take the driving analogy. Very few people would be able to handle going zero to 100. Good luck. It’s a lot, and it’s very fast.”

His advice for rookies is to deliberately slow down, way down, something echoed by the National Football League’s Players Association, their union. “ ‘Give yourself a time out’ is what I tell them,” said Dana Hammonds, the director of player services and development for the association. “Focus on football, and after you go through the season, you’ll have time to figure it all out. There is absolutely no need to get involved in any kind of investments. The only thing they need to do is figure out cash flow in their first couple of years.”

While few of us will ever earn the kind of money that a rising sports star can expect right out of the gate, that same advice holds true for anyone who receives an unexpected windfall, whether it’s a sweet raise or an inheritance. If there’s one lesson that Econ4U tries to pound home, it’s not what you make, but what you keep that matters most.

EOnline.com

In our popular Celebrity Financial Mistakes feature, we pointed out Burt Reynolds’s inglorious fiscal past, declaring bankruptcy once before:

After a red-hot career in the 1970s, Burt Reynolds bought himself a helicopter, multiple vacation homes, and a sprawling Florida ranch, but his divorce from actress Loni Anderson left him broke (though he got to keep the ranch).

Unfortunately for him, that ranch appears to be his money curse — because it’s now in foreclosure.

To make matters worse, Reynolds claims he didn’t even realize he hadn’t made a mortgage payment since September 2010, saying in a statement: “I am as surprised as everyone. I thought my career and my life could not be going better. To all of the people who have had such faith in me and stuck by me through thick and thin, thank you. I know it is not the end of the world.”

Considering that he last filed bankruptcy just 13 years ago, it seems Reynolds could use a little assistance in the money-management department — preferably from someone who’s willing to tell him that securing his financial future needs to be more than Gunsmoke and mirrors.

NYDailyNews.com

News has broken that there will be a 2011 pro football season after all (woohoo!). Under the deal, veteran NFL players will still be paid millions for doing what they do best. However, the ability to earn an outsize paycheck doesn’t mean that all NFL stars are financially secure.

The Wall Street Journal reports this week that two big names on the gridiron are fending off creditors instead of opponents on the field:

Former NFL defensive back Rick Sanford has admitted to fumbling. Sanford, also a former University of South Carolina football star, pleaded guilty to bankruptcy fraud and was given 30 days’ home confinement and 100 hours of community service, according to the State. The newspaper noted that Sanford’s legal troubles began after he filed for Chapter 7 in 2009. When a bankruptcy trustee challenged his list of assets—which included two Lexuses and a time share—he withdrew his bankruptcy petition.

Sanford wasn’t the only footballer in the news this week. Veteran quarterback Mark Brunell’s finances may become more strained Friday, as the New York Jets cut the 40-year-old backup, the Associated Press reported. That means Brunell won’t have his $1.25 million salary to draw on as he attempts to right his financial ship following his bankruptcy, which was largely wrapped up this off-season. Another team, however, may still sign Brunell. Under the former Pro Bowler’s debt-elimination plan, Brunell had committed to paying $16,300 for his personal effects—including a Super Bowl ring—to prevent them from heading to the auction block.

As we’ve mentioned before, pro sports players seem especially prone to bankruptcy when they start living outside their means. This news just goes to show that it’s not what you earn, it’s what you keep.

StarPulse.com

R. Kelly is in trouble again, although at least this time it’s not a big-time felony mess.

The Associated Press reports that he hasn’t made a mortgage payment on his Chicago mansion since June 2010, leading JP Morgan Chase to initiate foreclosure proceedings against the R&B singer:

Crain’s reports the Olympia Field home’s appraised value fell 26 percent in a year, to $3.8 million in 2010. The original 1999 loan was for $3.5 million.

The principal due is more than $2.9 million.

The R&B singer’s spokesman, Allan Mayer, declined to comment about the foreclosure. But he tells The Associated Press that Kelly isn’t in financial trouble.

If his spokesman is right and R. Kelly is not in dire financial straits, that makes this foreclosure all the more disappointing.

The home’s appraised value is higher than the balance on his loan, which puts him in a better position than the millions of Americans who are underwater on their mortgages. But based on this information, it just seems like R. Kelly got tired of paying what he owed on a property that is declining in value, and that makes it an ethics issue for him to walk away.

However, he may get what’s coming to him: Illinois is a recourse state, meaning the lender can come after him to pay for the balance of what he owes. I hope he’s saving the profits from his ongoing “Love Letter” tour, because he’s going to need them.

Life.com

Actress and dancer Debbie Reynolds, who’s perhaps best known for starring in Singin’ in the Rain, spent much of her career collecting an estimated 3,500 costumes and thousands more props to create a museum of Hollywood memorabilia. Unfortunately, sinking so much money into her hobby landed her in more than $4 million worth of debt, and a California bankruptcy judge ordered her last fall to auction off items from the collection to pay back her creditors.

Luckily for Reynolds, the court-ordered compromise worked better than anyone could have predicted.

Beverly Hills-based Profiles in History held an auction for select items in the collection last weekend and the proceeds far exceeded projections. The peak of the evening was the bidding war over the iconic white “subway grate” dress that Marilyn Monroe wore in the poster for The Seven Year Itch. That dress netted $4.6 million after commission — more than enough to settle Reynolds’ debts with that one sale alone.

Also among the notable bids were Dorothy’s ruby slippers and blue cotton dress from The Wizard of Oz, which sold together for $1.75 million, and one of Charlie Chaplin’s signature bowler hats, which went for $135,300.

Other auctions were initially planned but the success of this event may be enough to rescue Reynolds from financial ruin. And it provides a good lesson: When you feel completely broke, check your attic or basement for anything you can sell to scratch up enough cash to cover your bills as a short-term solution.

BravoTV.com

The Real Housewives reality-television franchise has spawned more bankruptcy filings than pro sports and celebrity accountant Kenneth Starr combined. We wondered why, so we reviewed the most notorious examples of the “real housewives” living beyond their means.

• Teresa Giudice is one of the most combative Real Housewives of New Jersey, and with this group, that’s quite a feat. A year ago, she and her husband Joe filed for bankruptcy with liabilities approaching $9 million while their income was reported as only $79,000 between them. Yet in the season that’s currently on air, Giudice continued to shop ’til she dropped (or more likely, until her credit limit is lowered).
• Sonja Morgan cried during last night’s episode of the Real Housewives of New York City while discussing her recent bankruptcy filing, which disclosed $19.8 million in debt and $13.5 million in assets following her bitter divorce from John Adams Morgan, the grandson of financier J.P. Morgan.
• Alexis Bellino of the Real Housewives of Orange County — the original show of the franchise — nearly lost her $6 million home to foreclosure proceedings in December after her husband Jim, a real-estate speculator, filed for Chapter 11 bankruptcy proceedings. You can view the waterfront mansion here, which was taken off the bank’s hands in a March short sale for $3 million.
• Michele Salahi only appeared in one season on Bravo — in the now-defunct Real Housewives of D.C. — but it was long enough to reveal the company she owns with her husband Tareq has gone bankrupt.
• Taylor Armstrong from the Real Housewives of Beverly Hills likely knows full well that her husband Russell filed for bankruptcy in 2005 with less than $50,000 in assets and millions in debt, but that didn’t seem to stop them from throwing a lavish $60,000 party to celebrate their daughter’s fourth birthday last year.
• NeNe Leakes, the breakout star of the Real Housewives of Atlanta, was evicted from her five-bedroom rental home in 2008, owing $6,240 in back rent. That’s not all she and her husband Gregg owed, either: The Leakes family reportedly also owes more than $100,000 in unpaid taxes.

The question must be asked: Can’t Bravo scratch up some real millionaires for the casts of these shows, rather than glamorize these pretenders to wealth? Or does starring on reality television cause the featured families to lose whatever financial sense made them rich in the first place?

Either way, it can be tempting to watch the lifestyles of the “rich and famous” on television and want to mimic their lifestyles or spending habits. But the bankruptcy track records show that isn’t the best idea.

MTV.com

On April 4, the IRS put liens on the Osbournes’ two Los Angeles-area mansions to cover tax debts of $718,948 from 2008 and $1,024,175 from the 2009 tax year. (Daughter Kelly was also slapped with a $34,000 lien last month.)

To the Osbournes’ credit, they promptly resolved the matter by cutting a check to the IRS last week. Sharon took to her Twitter page to explain the screw-up, which she said left even her accountant in the dark:

You can’t rely on anyone but yourself. You have to be on top of your own business affairs. My fault……..lesson learned

At more than $1.7 million, it was an expensive lesson indeed!

SingersRoom.com

Last October, R&B singer Toni Braxton filed for bankruptcy — for the second time in 12 years. The court determined she owed her creditors — among them Tiffany & Co., Neiman Marcus, and the Four Seasons — between $10 million and $50 million in unpaid debts.

Now Braxton has a reality television show ready to premiere this month, and from the looks of it, she hasn’t learned much from her mistakes:

However, the star appears to have shrugged off her legal woes for the filming of Braxton Family Values, according to the New York Post.

On the program, which premieres on April 12th, Braxton says, “I have a big-a** house, three cars, and I fly first class all around the world. Some say I have the perfect life.”

The trouble is, her track record shows she can’t begin to afford that “perfect life” that she’s bragging about. So much for “taking responsibility.”

Bankruptcy stays on your credit report for 10 years, so she can’t declare she’s broke again until 2020. But we doubt this is the last we’ll hear about her financial problems. Should we take bets on when Braxton will file for bankruptcy for a third time?