When things are going well, it's easy to assume that the gravy train will last forever. Expenses are allowed to grow in accordance to income. Credit card balances go up, houses get bigger and cars get flashier. The irony of making more money is that the temptation to over spend gets worse instead of better and it gets rationalized by the thought that the bills will get paid with next week's paycheck. Freedom dwindles and the cycle of obligation grows stronger.
This is how people who seem to make so much money end up in crippling debt and it is also why most small businesses ultimately go bankrupt. Life can turn on a dime. An unexpected illness or injury, the sudden loss of a job, a shift in the economy can change everything in an instant. The only thing that can't change in an instant is financial obligation. Bills don't magically go away after an unexpected change of cash flow and this is when things get ugly.
So the question is, what's your survival plan?
This is how people who seem to make so much money end up in crippling debt and it is also why most small businesses ultimately go bankrupt. Life can turn on a dime. An unexpected illness or injury, the sudden loss of a job, a shift in the economy can change everything in an instant. The only thing that can't change in an instant is financial obligation. Bills don't magically go away after an unexpected change of cash flow and this is when things get ugly.
So the question is, what's your survival plan?
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