Most people would agree that not having enough money can make life difficult. There are always bills to pay, and you can easily fall behind and become overwhelmed if you don’t have enough money. Still, the real issues often arise when people make poor decisions, especially if these choices are regularly repeated. If you make enough poor financial decisions, money can begin to destroy your life. However, if you prioritize making money too highly, you can also negatively affect your life. In addition to your credit and your financial future, relationships can be damaged if you focus too much on money.
Admittedly, making enough money without making potentially ruinous decisions can be a difficult balance to achieve, especially in a culture where success is so highly valued. It’s important to be careful with money, otherwise you may find yourself facing any of these five potentially life altering situations.
1. Too much debt
Regardless of how much money you make, you can rack up debt by making poor decisions with your money. If you use too many credit cards, or you purchase things you don’t need, you can easily find yourself in debt. Even an emergency that is completely out of control can burn through your money, leaving you in debt. According to 20s Finances, debt usually includes interest, which means you are paying more than you should. Over time, you are losing money that you could be saving.
If you get in too much debt, you also might destroy your credit score if you can’t pay your bills. You also may not be able to purchase a home or purchase other items that you want or need, and all of these issues can negatively affect your life.
2. Ruined relationships
We’ve all heard that arguments about finances are one of the main reasons people separate or divorce. According to a study completed in 2013 by a Kansas State University researcher, it takes longer to recover from an argument about money than any other argument. This means that money can destroy your relationships if you argue too much.
Money can also affect your relationships if you and your partner have different spending patterns, or if you spend so much time at work that you neglect your relationship. Getting ahead is great, but not if you neglect your relationships in order to do it.
3. Gambling problems
If you become too desperate for money, or if you just like to gamble for the fun of it, gambling can become another way that money can destroy your life. While some people enjoy gambling for the fun of it, if you take it too far and throw away your life savings, or get yourself in trouble by amassing debts you cannot pay, you risk financial, and potentially even more serious, harm.
Of course, gambling can also harm relationships. According to the Problem Gambling Institute of Ontario, in addition to affecting family members, gambling problems can also cause depression, anxiety, and even increase your chances of suicide.
4. Emergency Situations
Everyone needs an emergency savings. Putting money away for emergencies assists you when unexpected medical expenses arise, when you need to complete home repairs, and when your car breaks down, as well as in several other situations. If you don’t have an emergency savings, or you don’t have enough, money problems can destroy your life in an emergency.
Think about a potential medical emergency: if you can’t afford to have an emergency surgery, and your insurance won’t cover it, you risk serious health concerns, or piles of debt that you can’t pay. If your car breaks down and you can’t get to work, and you can’t afford to fix it or regularly take a taxi, you may lose your job, and then your house, and so on. Emergencies can quickly spiral out of control.
5. Poor Retirement
If you don’t save enough money for retirement, you can potentially ruin your life, or at least, the retirement life you dreamed of. You will need enough money to support yourself after you retire, and it requires regular savings to achieve this goal (CNN has a Retirement Calculator if you want to get started.) If you save too little, you risk getting a job you don’t want just to pay the bills, or having to cut back your lifestyle significantly at best. You also may not be able to move where you want to go, or participate in all the activities that you hoped for. At worst, you face potential homelessness if you can’t afford rent or your mortgage.
It’s obvious that you need money to pay bills, but when you stop and think about some of the more serious ways money can destroy your life, it becomes apparent that financial problems are not just financial. Problems caused by money can affect more than just your credit: these problems can negatively impact your relationships, your health, and your retirement.
More from Money & Career Cheat Sheet:
- 3 Alarming Facts About Debt You Need to See to Believe
- 4 Ways to Stop Losing Sleep Over Money Problems
- The Best Financial Advice I Ever Received