Financial stability is eroded when an individual, couple, family, or business partners utilize good or great financial resources to finance unhealthy financial behavior and decisions. Allow me to simplify the matter. If an elementary school student earns a grade of 50 in English, a grade of 60 in Math, and a grade of 70 in Science and receives a $500 pair of designer tennis shoes the Saturday after report cards are released, that is financing failure. While the example may seem egregious and extreme, this type of financial behavior occurs daily. Not only is financing failure unhealthy, but it is also unwise.
Think about the family member that has never experienced or known financial stability, and the ‘go to’ person in the family provides the perpetual rescue mission. Think about the many times you may have invested in a small business venture for a serial entrepreneur in your family. Think about the financial resources that may have been exhausted on the college education for a student that did not want to pursue higher education and obtain a degree of any kind. Think about the risks that have been taken on matters that did not make economic sense, but you decided to take a chance.
All risks should be calculated and should only include money and financial resources that you can lose without a significant impact on your financial position. Every high school graduate does not want to attend college. It is possible to find many alternatives to the pursuit of a college degree, and still become a productive and successful individual. Boundaries and limits should always be established. No one person, couple, family, or business should utilize resources to fund unproductive behaviors and matters on an ongoing basis. To eliminate the financing of failure, financial discipline is required. Otherwise, the funding of failure may lead to your own financial demise and instability.
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Nicole Michelle
Finance and Money Wiz
August 4, 2022
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