The story happens so often that it’s almost cliché: a promising young entrepreneur or urban professional is living the American dream with a great gig, open prospects, and money coming in hand over fist. The ending is also predictable: being so caught up in the ride, they forget to take care of things closest to home, relationships suffer, and finances get overextended.
Some observers would chalk it up to simple lack of focus or temporary distraction. In many cases, the damage gets caught and corrected before any real harm is done. However, in far too many cases the mistakes build until the inertia of the negative spiral is impossible to stop and, in most situations, difficult even to slow. In those cases, the only real solution is to stop completely and refocus on rebuilding one’s financial house. This necessary step might save you personally, however, permanent damage to your future career prospects may never be retrievable.
To be certain, the following three scenarios will tank your future:
There is not enough creative accounting in the world to trump basic arithmetic flaws. Just because you don’t address a problem does NOT mean that it does not exist and will disappear eventually. Sound elementary? Lack of attention to red flags in the early stages of money problems is the primary cause of financial ruin. Pretending to know better or be more mature than to fall into this trap is not a solution to this obvious problem.
The shell game
When a particular business effort isn’t making money or continues to fail to support itself, there comes a point where you MUST cut the cord and eliminate that option as a lifeline. Unfortunately, far too many serial entrepreneurs cave into the pressure to play the shell game by allowing a moderately successful enterprise to cover for a lesser performing business. In some small carefully monitored measures, one venture can keep another business afloat while it finds its feet. However, when this shell game is allowed to go for too long, it is not a solution – it is actually a death knell for BOTH enterprises.
Everyone has a hobby, however, if you want to be a success then you must keep your extracurricular expenses in check. There’s nothing wrong with playing hard until your recreation is exactly the reason your company or your success is being held back. Far too many young professionals try to imbibe upon the pleasures of success prematurely, thus stopping their success in its tracks and artificially retarding their actual potential.
As with anything, there is no guarantee that these words of basic advice will solve your personal financial issues. To be certain, the best way to keep your career on track and immune from these pitfalls is to avoid them altogether.