Phot by Skelekitten

I recently read an entry by Chris Guillebeau on the Art of Nonconformity blog entitled Business, Blogging, and Broken Windows.  I’m subscribed to Chris’ blog, and I enjoy his views about unconventional living.  In the post, he talks about the potential “broken windows” for an online business. For those unfamiliar with the Broken Windows Theory, it was first mentioned in an article in the Atlantic Monthly.  Here’s an excerpt:

Consider a building with a few broken windows. If the windows are not repaired, the tendency is for vandals to break a few more windows. Eventually, they may even break into the building, and if it’s unoccupied, perhaps become squatters or light fires inside.

Or consider a sidewalk. Some litter accumulates. Soon, more litter accumulates. Eventually, people even start leaving bags of trash from take-out restaurants there or breaking into cars.

Broken Windows in our financial lives

Broken windows can either be repaired quickly, or they can turn into lost causes.  If neglected, more broken windows appear, leading to complete ruin.  After reading the post, I though about the potential “broken windows” in our financial lives.  These would be the bad habits that we get into.  I started to compile a list in my head, based on what happened to a close friend of mine:

Broken Window #1 - You neglect to save any money for your emergency fund.

Broken Window #2 - Your car breaks down, and you charge the repair to your credit card, because you have no emergency fund.

Broken Window #3 - You pay only the minimum payment to your credit card, resulting in a finance charge being assessed for the outstanding balance.

Broken Window #4 - You lose your job.  You have no cushion in the bank, and can’t pay the minimum on your credit card.  Your credit card company assesses a late fee in addition to the finance charge.

Broken Window #5 - You finally get another job.  You save enough money for a down payment on a house, but your spotty credit history due to missed payments counts against you.  Don’t worry, you can still qualify for a subprime mortgage.

Broken Window #6 - The economy is in a shambles, and you lose your job.  Because of the housing bubble, your house value plummets, and you’re underwater on your mortgage.

Broken Window #7 - Your home is foreclosed, and you move in with your daughter.  Your financial life is in a shambles, just like the run-down building in the theory.  Only this is really happening.  If only you would have fixed that first broken window…

Don’t let small problems grow into big ones.  Fix what needs to be fixed.  A little inconvenience now will save you a lot of heartache later on.

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