Use arrow keys to navigate

One of the beauties of life is that we don’t know what will happen next. Sure, uncertainty can bring anxiety but it can also yield serendipitous experiences and unexpected joy! It allows us to feel organic, intense emotions.

However, when it comes to personal finances, unexpected events can really knock us off track, in some cases causing us to spiral too far out of control. Let’s look at five personal finance fiascos that ruin lives.

 

1. You Fall Ill

We can try to eat healthily and exercise on a regular basis, but we can’t eliminate the risk of becoming sick, especially when it comes to degenerative diseases, cancer, or a sudden accident that leaves us in poor physical shape. Should you fall ill, having insurance might lessen the financial burden, but many plans might leave additional bills on the table. It’s not uncommon for insured people to not be able to afford their bills.

 

2. Divorce

Marriage can be a beautiful thing, but when things go south, a lot of problems can arise. Becoming one household is financially advantageous for things like taxes and property ownership, even paying back debt—but when a split occurs, various financial details are up in the air.

Given that 40–50 percent of married couples in the U.S. divorce, it’s safe to say a lot of people experience a financial shake-up each year. Some divorces end businesses, strip car ownership to people who need it and decimate savings.

 

3. Car Breaks Down

blue sedan on snow at daytime

For most of us, a car is how we navigate our world. We use it to get to work, buy groceries, socialize and more. But unless we’re leasing our vehicles or continually swapping our old cars for a newer purchase, automobile maintenance is inevitable. Since most car owners fail to do routine maintenance on their automobiles, the possibility of a more severe breakdown increases.

For many people living month to month, replacing a transmission (average cost $1,800–$3,400) or a repairing/replacing an engine (average cost $2,250–$4,000) is financially devastating. Many people will put this purchase on credit because they need wheels. A downward spiral with credit debt often ensues.

 

4. Death of a Close Family Member

As much as we hope death won’t strike our loved ones or us until old age, diseases and accidents can take force at any moment. It might feel wrong to think of loved ones dying within financial terms, but after the stages of grieving often comes the surfacing of old debt—or for a household, a loss of income, bandwidth to take care of kids and the overarching tint of emotional support.

 

5. Your Business Fails

architecture bridge buildings business

Many financial experts would advise against someone’s small business being tied up in personal finances, but the blunder is still committed. As CEO of Freedom Financial Network Andrew Housser puts it, personal finance know-how can help your small business, but that doesn’t mean the two worlds should be merged to one.

When people fail to draw firm lines between their personal finances and their business operation, they’re putting all their eggs in one basket. Considering half of all small businesses fail within five years, parlaying your personal finances with your SMB is a significant, unnecessary risk to take.

We never know what’s in our future, but by exercising frugality in our daily purchasing behavior and building an emergency fund, we put ourselves in a better position to handle the aftermath of an impactful life event.

Use arrow keys to navigate

Posted by Nipanan Lifestyle

Hello, I'm Nipanan. I love researching and creating engaging content to share with the world. Feel free to check out my website for more unique content.

Leave a reply

Your email address will not be published. Required fields are marked *

Powered by Creative Market