You’d like to hope that most of the time you have pretty good control over your finances. You know how much you work, therefore you know how much money you make. You know what your bills are and your typical expenses, therefore you know how much money is going out of your accounts each day or each month.
But, this control is not permanent. In fact, there are several uncontrollable ways that you can end up losing money fast. At the very least, you should mentally prepare for these occasions, so you won’t be taken totally by surprise.
Several examples come to mind quite quickly that fit in this category. If you are involved in an accident or are injured somehow, it can be very expensive. If the stock market fluctuates up or down outside of your control, your savings can rapidly change. If you get fired from your job, suddenly you are in a much different economic circumstance. And if you go through a divorce, the potential for half of your money being gone immediately is right there in front of you.
Accidents and Injury
After a personal injury, several things happen. You might have to pay for lawyers. You might have to pay for medical expenses. If there are any adjustments to your insurance rates, suddenly you’ll have additional bills to pay in that realm. Regardless of whether the accident was your fault, especially if there’s an injury involved, you may owe a lot of money very quickly. That can spiral into severe financial debt if you don’t figure out how to mitigate some of these expenses.
Stock Market Fluctuations
If you’ve invested in the stock market, then those conditions are outside of your control. In the event of a stock market crash, your economic circumstances can take an incredible hit. It can make some people go into bankruptcy. It can make some people lose their entire retirement savings. Lots of bad things can happen!
If you try to keep your investment portfolio variable enough, you should be able to mitigate the worst part of a stock market fluctuation or even crash, but if you haven’t diversified sufficiently, it can be a life-changing event to lose your shirt from financial issues outside of your control.
One of the fastest ways to lose a lot of money quickly is to get fired. You rely on your income to survive. If you do something to get yourself fired, you will suddenly not have that income. In some cases, getting fired is not your fault.
If your company is going through downsizing or moving through a layoff stage, it’s not your fault, but it’s still something that you can’t control. If you don’t already have another job lined up or at least your resume ready and some potential leads, a termination situation can be much more dire than it has to be.
Going Through a Divorce
A final way that you can lose a lot of money fast is if you decide to get a divorce. Depending on if you or your spouse makes more money or has more savings, any situation that is less than amicable can lead you to lose half of what you own.