When it comes to money, the word “comfortable” is a lot like the words “success” and “wealth.” There’s never going to be a firm definition, because everyone’s idea of what it means to be financially comfortable is different.
A few years ago I was financially comfortable, at least by my standards. To spare you all the mundane details my income was racing out ahead of my expenses. For the first time in my adult life I had some real money in the bank.
Within three years I was defaulting on credit card accounts, having my heat shut off, and eating a whole lot of Ramen. In other words, I was broke. And I shouldn’t have been. Because I didn’t suffer a catastrophic setback. I did it to myself.
It wasn’t especially exciting or cinematic, either. I had no lavish trips or expensive possessions to show for my bad money behavior. I just made four mistakes – mistakes a lot of financially comfortable people tend to make.
I Didn’t Pay Attention
I moved from western New York to New England. I had plenty of money in my checking account (and it was all in my checking account, not my savings account, because stupid). I spent pretty normally. I took a very low-paying job with a non-profit, because I thought it would be a good experience, and hey, I’ve got all this other money saved up.
In reality, my income and expenses were secretly upside-down, but I didn’t know it, because I had the money to support my un-budgeted lifestyle. At least, I had the money to support it…for a while.
I’m sure I’m not the first person, faced with an adequate bank account, who didn’t think they needed to look at their statements, or make a budget, or do anything at all. When basic money management isn’t an ingrained part of your daily routine, you tend to avoid it – unless, of course, things get tight, and you can’t afford to look the other way.