In December of 2009, my ex wife and I had approximately 20k in savings. We ran our own business, and were making a killing at it. Business started tapering off, but I never stopped to question why. We started dipping into savings, but didn’t adjust our spending. Soon savings were gone, and I was tapping credit cards to pay bills and keep the company afloat. It turns out there was a problem employee who ended up causing the entire business to shut down due to mistakes she was making with clients. Come December of 2010, I was now 60k in debt and had to shut the doors of the business. In January of 2011 I was facing foreclosure on my house. Had I started watching spending and income as soon as there was a problem, I might have avoided the catastrophe entirely. Instead, I just kept assuming things would get better. You never know when things are going to turn around (or keep going south).
Submitted by: Anonymous
It sounds as if the author has already learned his lesson and what not to do in the future. Paying attention to our finances regularly would allow us to notice when something is going wrong and adjust our spending accordingly. The moment a business doesn’t pay for itself and starts tapping into savings is the moment it is no longer a business, but an expensive hobby.
Amount Flushed Down the Money Drain: $80,000