I remember my second year of college very well. It was 10:30 at night and I was leaving my girlfriend’s apartment in the car. Instead of stopping completely at the stop sign, I moved slowly and turned right. There was no one on the streets, so I took a chance.
That opportunity cost me $60. A police officer pulled me over for a moving violation, and I was wrecked. At the time, I probably had $500 after working at McDonald’s and doing temp work for $4.25 an hour. I was so angry that when I mailed my check, I attached a note saying I hoped they would do something positive with my $60.
That was the first time I felt true financial despair. This won’t be the last.
Feelings of financial despair returned
Recently, my wife took the car to do some volunteer work at our kids’ school. When she returned, she parked in our driveway, then drove to our son’s first preschool. I’m proud of her for taking online education courses to become a certified teacher. With her kind, patient behavior and maternal instincts, she will make an excellent person.
Unfortunately, the pay is a low $24 an hour. But when you don’t have health care benefits, retirement benefits or a steady active income, every dollar helps. Additionally, teaching gives him a great sense of purpose. So when I went out to pick up the kids around 4:30 p.m., I saw a ticket on our windshield. How can this be possible? The car had been standing in our path for hours.
Then I took a closer look at the $108 ticket. The car was apparently on the side of the road during road cleaning near our children’s school that morning. breath. no good deed goes unpunished. My wife drove up to volunteer for an hour, and was rewarded with a ticket that would pay for six hours of babysitting.
I couldn’t help but be angry, because I’d already lost thousands of dollars fixing the car. After 60 consecutive days of “system will shut down in 1 minute” warnings that no one can get past some electrical gremlin, disappointment begins to seem inevitable.
So in addition to financial disappointment, I also felt angry. With so many problems associated with the simple need to get somewhere, I began to fantasize about abandoning the car altogether, taking Uber everywhere, or never leaving home again.
Overcoming the feeling of being unable to get ahead financially
I’m writing this post partly because some readers criticized me for being out of touch with my article, “Sure $10 Million Is Enough to Retire Early.” I thought I was making a strong argument that people who don’t think $10 million is enough haven’t done the math. However, perhaps I was not critical enough?
Or it may be that writing about numbers larger than average violates one’s sense of well-being. I am not sure. Anyhow, I thought I’d do a complete 180 and talk about surviving dire financial situations instead. I think some people like to read about tragedy because it makes them feel better about themselves.
Getting a ticket or having an accident that results in losing a day or a month’s salary is unfortunate. But there are more serious situations that we may have to face.
Main events that will cause financial disappointment
The first thing that comes to mind, since I just wrote about this topic, is what happens to your surviving spouse and children if the primary income earner dies prematurely. The solution, even if you’re already on fire, is one term life insurance policy It covers the household until the loan is paid off and the children become independent adults. I pray that you all live a long and healthy life.
Another source of frustration is losing one’s job while taking on debt and supporting others. Hopefully your company will offer a severance package that will tide you over for a few months. After that, the frustration grows every day when another company ignores your application, and you start wondering if you’ll ever work again as your expenses mount, regardless of your panic.
The third is to lose your job and see your investments decline by 20% or more in a bear market. It’s the double uppercut on the chin that many felt in 2008. I was so worried about getting fired that I quit collecting my $25,000 MBA tuition reimbursement in early 2007. Cracks were forming, so I read the room.
The fourth is a catch-all. It comes from finally achieving a financial goal, and as soon as you exhale, you are handed another challenge. Foolishly, I thought my financial quest as a parent ended when our two 529 plans completed four years at the most expensive private universities. Then a fellow Diamond Head pickleball court guy told me he was “saving money” on eldercare by only paying $18,000 a month for his mother’s group home. Just like that, with four parents to support and $1 to $3 million expected, I felt defeated again.
How to overcome financial disappointment
Here’s the good news. After 30 years of swinging between broken and comfortable and sometimes back to broken, I’ve learned that depression is a feeling, not a permanent state. And emotions react to actions. This is exactly what I do to get out of the hole.
1. Limit disappointment to real numbers.
Frustration breeds ambiguity. “We are going to be ruined” is shocking. “We owe $108, which is six hours of work” That’s just a Tuesday. The moment you turn a vague fear into a concrete shape, your brain stops spinning and starts solving. Write down what the problem really costs, then write the next single action that makes it go away. The crisis is just a math problem wearing a scary mask.
2. Keep a disappointment buffer separate from your investments.
Most people park their emergency cash in their portfolio, then panic when both fall apart simultaneously. Instead, keep three to six months’ worth of expenses in boring cash whose only job is to absorb parking tickets, fender benders, vet bills and broken water heaters. The issue is not about withdrawal. The point is that small disasters remain a nuisance rather than becoming a disaster. A buffered exhalation is allowed.
3. Refuse to rely on a single income source.
An income stream is a single point of failure. Three is flexibility. Eight can create lasting financial security. Even a small movement can change the way you sleep at night. Focus on creating as many sources of passive income as possible. Don’t wait until you lose your main source of income to start.
4. Insure yourself against calamities and avoid inconveniences.
The events that really devastate families are death, disability, and lawsuits, so aggressively insure them with term life, long-term disability, and an umbrella policy. But don’t file a claim on a $108 ticket or a $500 fender bender. Self-insure the small stuff, move the bad stuff, and you’ve eliminated most of the scenarios that keep you awake.
5. Zoom out to a ten-year view.
Time heals most financial mistakes. We find new jobs, recover from market losses, build bigger buffers and grow our skills. Ten years from now, this week’s ticket won’t even be a memory. The frustration you’re feeling today is real, but it’s also temporary, and it’s often the exact discomfort that forces you to adapt and make more money.
6. Stop comparing. Compare back.
My pickleball friend handed me the latest $3 million problem within five minutes, simply by increasing my level. Comparison is the quickest path to disappointment ever discovered. So compare yourself to where you started, not to the richest man on the courts. The college version of me, mailing in a passive aggressive note with a check for $60, was stunned to see where things ended.
7. Do one thing today.
Disappointment happens when you sit still and contemplate. Action, any action, restores a sense of control. Cancel subscription. Sell something on Facebook Marketplace. Apply for a job. Transfer $50 to savings. Momentum is also an emotion, and it is the opposite of frustration.
In 2023, I hurt myself financially by buying a dream house we didn’t need. My family was perfectly happy with its pristine location with panoramic sea views, side-by-side parking and quiet location. But my obsession with climbing the property ladder increased our passive income to $150,000 per year and drained our liquidity.
The last time I was living paycheck to paycheck was in 2005, except when I had a six-figure job, which I suddenly learned to love. In 2023, I had no steady salary. I still don’t. So I solidified the passive income loss numbers, took a part-time consulting job with a startup, created a new income stream online, and reminded myself that nothing good or bad lasts forever. The disappointment went away, as it always does.
You will do whatever it takes to get out of your financial crisis.
When people depend on you, you discover a resourcefulness you didn’t know you had. Financial despair is extremely uncomfortable, but discomfort is also the most reliable motivator I have ever found. When life is easy and the portfolio is hitting all-time highs, no one upgrades their skills, takes on any extra work, or finally builds an emergency fund.
So if you’re in a mess right now, looking at a ticket on your windshield or staring at an inbox filled with silence, take comfort in this: The disappointment is temporary, and it’s nudging you somewhere productive. Make the numbers concrete. Create a buffer. Add source of income. Then go pick up your kids from school, because that part was never about the money.
And maybe, just maybe, take your time and double-check the confusing parking signs before leaving your car to the city vultures who are eager to tear you to death.
Reader Questions and Suggestions
Readers, have you ever felt true financial despair? What was the reason for this and how did you finally come out of it? And when one expensive surprise after another keeps landing on your windshield, what little tricks do you use to talk yourself out of it? What are other types of financial despair?
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