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Celebrating Financial Freedom

How to Prevent Money Leaks

Have you ever had a water leak in your house that caused a lot of damage? A few years ago, we took a trip to my in-law's house for Thanksgiving weekend. We had a relaxing weekend, and as we arrived back to our house on Sunday afternoon, we opened the garage door and found a watery disaster.

HOLY CRAP!

The garage ceiling was laying on the floor in a huge pool of water.

This was not good.

We had failed to turn off the main water valve to the house before we left on the trip. When I got up the stairs I found that the leak was coming from our clothes washer. There was a valve that was malfunctioning, causing a small leak, drop by drop, that ended up causing a lot of damage after four days of dripping.

The linoleum in the laundry room was coming up, the carpet in the hall was soaked, and the hardwood flooring in the kitchen was twisted and warped.

This was not what I wanted to see.

Making an Insurance Claim

We decided to call our insurance company and they were right on it. They sent out their adjuster to assess the damage and get dehumidifiers and fans to start drying everything out. A couple of days later their contractor came by to figure out what had to be done to get our house back to normal.

Total estimate for repairs: Over $5,000!

Thankfully, we have great insurance. After a couple of weeks of getting the subfloors dried out, the contractor was able to get started replacing drywall, linoleum, trim, hardwood, carpet, paint, etc.

From start to finish, it took about 2 months of inconvenience to get everything replace and back to normal again. It was nice to finally get the contractors out of the house and let life get back to normal again.

Money Leaks Cause Damage Too

So here's the reason for telling our story: Discovering a leak in your house that causes a ton of damage is just like the little leaks you can experience in your money situation.

It can be very easy to get complacent with your money. When you do that, little drops can leak out here and there, and over time, can end up creating a lot of damage to your finances.

It's not difficult to let those little leaks turn into large amounts of credit card and other debt that can overwhelm you and ,over time, can cause your financial house to crumble.

Think about it, most people don't go out and get a credit card and immediately go out and charge $10,000 on it. But the drip, drip, drip of small and medium sized purchases over a few years time that ends up in $10,000 or $20,000 worth of credit card debt is a pretty common occurence.

Add that in with other types of debt like personal loans, home equity loans, cars, and other debt, then that drip can become a flood, and cause a lot of damage.

Stopping the Money Leaks

So what do you do to keep the drips from happening? You actively take control of the situation.

If we had been smart and turned off the main water valve to the house when we left town like we usually do, we wouldn't have had to deal with the devastation of the water leak. When sit down and take control of your money by doing a written spending plan (yes, a budget) every month and stick to it, you will discover where your money is leaking away and learn to stop those leaks, which will cause you to stop spending more than you make.

Yes, there might be much more you need to do to repair the damage that your money leaks may have caused by constant dripping over the years, but taking control and stopping the drip is the best first step in the process. When you get rid of the dripping and fix the damage to your financial house, that's when you start winning financially!

Here’s a verse from the Old Testament that I think sums up just what effect money leaks can have on your life:

“Give careful thought to your ways, you have planted much but harvested little. You eat but never have enough. You drink, but never have your fill. You put on clothes, but are not warm. You earn wages, only to put them into a bag with holes in it.”- Haggai 1:5-6

"Dr. Jason Cabler is a Christian personal finance blogger, author, and speaker. He teaches how to get out of debt and live a debt free lifestyle through his Celebrating Financial Freedom blog and self study course . His new book "How to Budget- The Quick and Easy Guide to Making a Budget That Works" is now available ( more info here ). He can be reached for interviews or speaking engagements by email , and can be found on Twitter , Facebook , and Google + ."

Resources:

Money Leaks Will Damage Your Financial Foundation

Living Paycheck to Paycheck?- How to Get Ahead

7 Credit Card Lies We Tell Ourselves

How to Get Out of Debt Part 1- Get Mad and Naked

How Do You Start a Budget?

Comments

 

???I Don???t Have Time??? and Other Budgeting Excuses You Can Fix Right Now | Enemy of Debt said:

Pingback from  ???I Don???t Have Time??? and Other Budgeting Excuses You Can Fix Right Now | Enemy of Debt

May 16, 2014 9:50 AM
 

Are You Using These Excuses?- 5 Budgeting Excuses and How You Can Overcome Them said:

Pingback from  Are You Using These Excuses?- 5 Budgeting Excuses and How You Can Overcome Them

May 23, 2014 10:11 PM

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