Imagine raising five young children, watching the economy collapse into itself, and not changing your spending habits. I don’t have to, because it happened to me during the Great Recession of 2008.
I have to say, I don’t recommend it. My naivete led to my financial downfall, a divorce, losing touch with my family, and even becoming homeless for a time.
As many of us are now on the edge of our seats wondering what’s next for our current economy, I’m planning to be a bit more cautious this time around. I’ve learned a lot of hard lessons since the last recession, and I won’t be making the same mistakes again.
Life seemed good
I felt economically stable in the late-2000s. I had a good salary as a technical writer at Citigroup. My wife and I owned a four-bedroom house, two cars, and had some discretionary money. Our life was comfortable.
I wasn’t anxious about the 2007 subprime mortgage implosion. After all, I had a 30-year fixed-rate loan.
I wasn’t concerned about the stock market crash of September 2008. In my mind, that was karma hitting back at the never-ending greed of American businesses.
I didn’t worry about Citigroup — a multi-national company with billions in assets. Surely, the nearly two-century-old bank was too big to fail.
Then they weren’t.
I pretended everything was fine
I obsessively watched Citigroup’s stock losemuch of its value. For the briefest of moments in November 2008, it fell below a dollar a share before rallying.
When this happened, I momentarily envisioned a worst-case scenario: Citigroup might rapidly collapse under its financial weight, taking its thousands of employees with it — including me.
I didn’t physically reveal my discomfort at the time. Instead, I moved forward like the economic world wasn’t on fire. I put on an impassive face and assured my family that nothing was wrong.
My wife and I didn’t have late-night chats on proper budgeting. We didn’t talk to the kids about tightening our belts. I didn’t speak to a financial advisor or shop around for lower car insurance costs. In retrospect, I should have done everything I could to secure my family’s financial future.
Instead, I spent thousands of dollars on a family vacation to Disney World. We refinished our deck, purchased new kitchen flooring, and updated appliances. In 2009, we welcomed our fifth child, adding more expenses.
We purchased some of these items with cash (new baby excluded), but a large percentage was purchased with credit, eventually resulting in thousands of dollars of debt.
Still, it seemed like calm seas for the S.S. Keller. However, I wasn’t steering a double-hulled cruise ship. I was rowing a dinghy against the current as a waterfall of denial loomed in front of me.
Now I know better
This life of lying to myself and my family hurt everyone in the end. In my mind, it was okay to tap into the savings and use credit for expenses beyond the budget. I had a steady, well-paying job at a large corporation.
Yet, I repeatedly overextended my finances when I should have been reeling in my family’s financial habits. Compounding this was undiagnosed bipolar disorder. This contributed to impulsive spending and magical thinking about unrealistic financial assessments, but not all could be blamed on this eventual diagnosis.
The mistakes I made during this time led to my eventual divorce and a stretch of time that I spent homeless. The transition from a four-bedroom house to a minivan was a devastating blow.
Further, each time I review my credit report I cringe at the history of my financial missteps.
I didn’t learn how to be financially responsible until after my bipolar diagnosis in 2020. Before that, I spent money as soon as it was earned. I lied to my family and endangered their financial stability. It has taken years to heal the wounds.
I now know that honesty and open communication with your family, even about difficult topics like finances, are essential for navigating uncertainty. While you don’t have to prepare for the worst-case scenario, you must have the necessary monetary tools to withstand economic turbulence. This includes an emergency fund, budget, and debt reduction plan. I know this now, and I will be keeping it in mind in the coming months.
Today, I live in Northern Colorado and work hard to maintain a solid financial foundation. Although I recently lost my job, I don’t give up and do the minimum to find a new position like I used to. I put in 100%, even when my neurodivergence wants me to do otherwise.
It’s a precarious balancing act, especially for someone in their mid-50s. Nevertheless, I’m determined to live a life of abundance instead of scarcity.
