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You’ve probably heard in the news that major portions of our economy were based on a house of cards. Maybe you wondered how anyone could think that was a good idea.

But I suspect many of us have personal economies that are built on a house of cards, and maybe we just haven’t recognized it. I know that mine used to be, and that it’s all too easy to have happen.

Here’s how it often goes:

You see something you want, and try to figure out how you can afford it. You take a look at your current income and expenses, and see what kind of room you have in your budget. Maybe you have an extra $200 per month leftover that isn’t earmarked for anything.

So you figure that you can afford something that commits you to $200 or less per month for x number of years. This sounds logical, but it’s based on one big assumption: that you will definitely have at least an extra $200 per month leftover each month.

What happens if the cost of other things you’re currently buying unexpectedly increase? (Things like food, electricity, gas, etc.) What happens if you lose your job? In other words, what happens if your assumption was wrong?

Even if your assumption was right, and you do continue to make that extra $200 per month for x years, that means that you no longer have that money available for other things. Now it’s a required minimum payment. You’re squeezed even tighter, and now it’s even more important that things go precisely right.

How often does life go exactly the way we’ve planned?

It’s all too easy to go from feeling like you’re doing fine to realizing that you weren’t.

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