Often I try to tell my readers about why specific clients end up calling us.  Not everybody needs credit repair or debt relief because they’re irresponsible with their credit cards or they borrow with no intention of paying their bills.  Sometimes it’s really just a product of not planning their finances properly.

A Rainy Day Will Come

I spoke to someone today who was walking a fine line between prudent credit usage and being overwhelmed with credit card debt.  While he wasn’t exactly maxed out on his credit cards, he was running balances around 50% of the limit on his 2 cards and he wasn’t putting any money into savings.

Then the week from hell happened.  They say that bad things come in threes.  Well that was certainly the case for this guy.  First it was the check engine light.  Harmless enough, things like that are expected to happen from time to time.  So off to the mechanic he goes.  $860 later his car is fixed.  The payment would max out one of his two credit cards.

Then there were bugs.  Termites to be exact.  Literally within days of his car trouble, his wife found termites eating away at a tree very near their home.  He would later find that a colony was actually located in his home, eating away at the foundation.  Another $1,800 down the drain and another credit card at its limit.  And he has yet to get an estimate for possible structural damage.

Then the worst news of all came: his company, the business he’d worked at for years, was closing their doors.  That’s pretty much when the financial tailspin began.  He was the sole source of income in the house and now there were outstanding debts, a mortgage, car payments, and no income to pay for any of it.

That’s Why it’s Called a “Rainy Day” Fund

Don’t get me wrong, what happened here was the perfect storm of bad luck.  But this is why it’s so important to have money put away for when life’s unexpected events hit you in the wallet.  Even if you’re only putting away $10-$20 from every paycheck, it’ll add up.

You also want to keep your credit card balances as low as possible.  Don’t think of them as money you can pay back at a later point, but instead think of them as money that you can fall back on in the event of an emergency.

One of the major reasons that our clients are with us, whether it’s for the credit repair, the debt relief or usually both, is because they never planned for a financial emergency.  It’s going to happen to all of us.  Machines break down, people get sick, companies go out of business.  The question is, how prepared are you to deal with it when it happens to you?