What Celebs Can Teach Us About Money (Mis)Management

By Katie Taylor Updated on May 7, 2019

Have you ever thought that if you were making a movie star's salary, you'd never have to worry about your finances again? 

Perhaps that's true, but spending less than you make takes discipline no matter how much is in your bank account. Even the richest celebrities get into money trouble. Here are ten examples of celebs who overspent, underpaid, and made financial messes. Learn from their mistakes.

concert crowd-369670-edited-409739-edited.jpeg

Johnny Depp 

Living above your means isn’t just a problem for us plebeians. If you’re Johnny Depp, you might be inclined to spend, say, $30,000 on wine in a single month — or pay $3 million to have your friend’s ashes shot out of a cannon. Because why not? 

Unfortunately for the Pirates of the Caribbean star, no matter how much money you have, spending more than you bring in will land you in financial trouble. Depp sued his managers for mismanagement of funds. But they didn't back down.

Instead, they supplied the court with a blistering countersuit, detailing all the star’s extravagant expenses — including that expensive vino habit.

Toni Braxton

The '90s pop star has filed for bankruptcy not once, but twice.

She blames a combination of bad luck — like getting diagnosed with a chronic disease that left her unable to perform months after self-financing a Vegas comeback — and a penchant for luxury housewares. Specifically, Braxton says she overspent on things like 1000-thread count sheets and Faberge eggs.

Braxton is skilled at the hustle, though. Since dismal record sales had her filing for bankruptcy a second time, she's found ways to make money. She's the star of her own reality show and performs in Europe, where audiences still love her.

MC Hammer

Even though his hit album Please Hammer, Don’t Hurt ‘Em remains one of the highest-selling hip-hop albums of all time, MC Hammer is familiar with financial strain.

How does a celebrity drop from an estimated net worth of $33 million to owing more than $13 million in debt just five years later? Hammer swears he’s not a high roller. He says he spent those millions helping others and employing people in his community — and that he has no regrets.

Unfortunately, a charitable spirit doesn't always pay the bills. 

Kim Basinger

A contract dispute sent the glamorous star of Batman into bankruptcy. After Basinger pulled out of a movie deal in 1993, the studio sued her for $74 million. Even a star doesn't have access to that kind of cash.

Unfortunately, her bankruptcy filing also impacted a small Georgia town she had purchased along with some other investors. They had to sell off parts of the town to pay those debts, and Basinger was blasted for continuing to live in luxury while the town residents waited in limbo.

Sinbad

After filing for bankruptcy a second time, the popular comedian said it wasn’t a lavish lifestyle that brought him down.

Instead, Sinbad said he was counting on the next big movie, and it just never came. The star fronted his media company the money to continue operating when things were tight, believing that another hit film was right around the corner.

Unfortunately, his company never rounded that corner and Sinbad ended up $11 million in debt.

Imagine Life Without a Student Loan Payment... Start Saving Now!

Mike Tyson

When celebrated boxing champion Mike Tyson filed for bankruptcy in 2003, he was $23 million in debt, with $13.4 million of those dollars owed to the IRS.

He lost his cash the old fashioned way: spending money he didn’t have. In his bankruptcy filing, Tyson counted jewelers, trainers, lawyers, and ex-wives among his creditors. They gave him goods and services — like a $173,000 gold and diamond chain — on credit, believing he'd pay. Unfortunately for Tyson and his creditors, they were wrong.

Lindsay Lohan

After years of arrests, rehab stints, and vague allegations of misconduct, the Mean Girls star has a well-documented reputation of irresponsibility. Unfortunately for her bank account, that behavior extends to over-spending

When the IRS showed up asking for payment on a hefty tax bill, Lohan didn't have the cash. The IRS responded by freezing her accounts. 

Nicolas Cage

Cage is one of the highest-paid actors of all time, but his extravagant tastes led spending the over $150 million he made on movies between 1996 and 2011 — and owing the IRS over $13 million. 

What floats Cage’s boat? Well, boats, for one. He purportedly had four yachts, one of which had 12 master bedrooms. He also purchased albino king cobras, dinosaur skulls, and a haunted mansion in New Orleans. 

Like Johnny Depp, he sued his manager for mismanagement of funds. And like Depp, he got countersued, his manager claiming Cage’s excessive spending was the only reason for his financial troubles. 

Dennis Rodman

After basketball’s favorite wild child retired, he didn’t rein in his spending. In 2012, he owed over $800,000 in unpaid child support to his former wife, as well as back taxes to the IRS. His lawyer claimed he couldn’t pay because he was broke.

His lawyer also said his money woes were caused by his alcoholism, which impacted his ability to get work. Others said he spent thousands traveling around the world hosting parties. 

Stacy London 

After a serious back surgery, the What Not to Wear star wasn’t prepared for the difficult road to recovery. She turned to online shopping and paid for lavish vacations as she tried to save a failing relationship with her boyfriend.

In a deeply personal essay, London explained that she later realized she was spending money as a way to cope with clinical depression. She didn't begin to get control of her bank account until her accountant told her that she was very nearly broke.

What it means to you

What can you learn from these very expensive celebrity money mistakes? 

1. The tax man doesn't discriminate. Make sure you set aside money for that April 15 deadline. 

2. If you don't have the money for it now, it's not a good time to buy. 

3. Giving to others is noble, but you need to have the cash to pay your own expenses first. 

4. Spending money may feel good momentarily, but an empty bank account hurts for a long time. 

Following the basic money principles above will help keep you from following in these celebrities' footsteps. If you're already smart with your cash but could use a little extra each month, consider refinancing your student loans

About the Author
Katie Taylor

Katie Taylor is a content writer and editor with expertise in law and policy, finance, and entrepreneurship. She writes for startups and small businesses about everything from bookkeeping to telecom. Her work has been featured in The Washington Post and SheKnows.com. She is continuing to pay off law school loans and lives in Richmond, Vermont with her wife, son, and an unruly dog. Read more by Katie Taylor