Is It Really Bad Luck?
Or just poor decisions?
I had a friend once tell me that if I did not have bad luck I would not have any luck at all, and yes I know that is a lyric in many blues songs, but at the time I thought it to be true.
I was barely making it. My house had finally sold but I had only broken even. I had already cashed in my 401k and now owed the taxes on the amount. I owed over $2k on an income of approximately $50k. I was also the only one in the family working at the time and we still had to pay for childcare.
My wife was in and out of the hospital and every time she would be admitted was another $1k per week, money that I did not have. I would put it on my American Express and hope to pay it off the following month, but it kept adding up. Even though American Express requires you to pay off the balance monthly they actually had a program where I could move part of the amount to an interest-bearing portion of my credit line.
What a mistake that was. By the end of that year I had over $9k on American Express and had accrued another few thousand each on my other cards. My truck was close to $500 a month, my rent was fairly cheap at the time at $900 a month but add on child care and other expenses and I barely was making it.
And Things Get Worse
And then my wife was in an automobile accident. I was glad at the time that I had my motorcycle but with that being the only other transportation we had I was left riding my bike year-round. Even though we lived in the south, what most people may not understand is that the winter is still cold.
I used to wear long underwear into work and then change in the bathroom when I arrived. All the while waiting for my hands to thaw so I could eventually feel something again. When she crashed the truck that was one of those times that I just thought things could not get any worse. It was also the time that my coworker told me the bad luck line.
One thing about South Carolina, every day at about 4 pm it would rain. This just happened to be at the time I would be commuting. After having heard about my wife’s accident and having to head home to make sure she was okay, I walked out into a torrential downpour.
Was It Really Bad Luck or Poor Planning?
Thinking back on this though, it was not bad luck that got me where I was, but a series of financial mistakes. Leaving Utah was not a bad decision but the timing was terrible and I was rash in doing so. I did not finish the basement like I wanted to in the old house. I rushed the job just to get out. I hired the wrong realtor even against the recommendation of my friend.
I moved at the beginning of the winter, a time that was notoriously slow for real estate transactions and when it took more than six months to sell my house I used my 401k to fund the mortgage. All of those decisions led me to where I was, not just the medical issues that we were facing and surely not the automobile accident.
This is why it is extremely important to have an emergency fund. We will all at some point have what we perceive as bad luck. Things that are beyond our control, an accident, job loss, veterinary bills (I will get to that one later), medical bills, no matter how much you plan things happen. Once you have that fund you no longer worry about bad luck.
Had I planned in advance when we were making good money the decisions would have been easier to make and the impact would have been much less.