In December I loaned out quite a significant sum of money to an old friend. This was against my better judgement (the person is not not particularly creditworthy), but things were looking up for him and I felt since I an opportunity to help, I might as well do so, or so I thought. It was a significant sum but thankfully something I can afford to lose if the worst happens.

I just found out a few days ago that his debt situation is worse off than I ever imagined, and from all intents and purposes my money is not coming back. I honestly am more concerned about how this person managed to get himself into such a financial mess, being a young, single guy with so many upsides to his personality.

We work similar jobs in the same financial industry with different companies and earn similar incomes. The money may not be so great but he really should be comfortable to an extent. Also, he's not a particularly ostentatious person and seemed to embrace the easy lifestyle. So how does someone whose lifestyle should have no business being in a financial mess end up with so much debt?

I was speaking earlier with a mutual friend who is closer to him than I am, and it was mentioned that apparently he had a spending habit of seeking out the latest tools and gadgets to make himself as comfortable as possible. That is a start, but not necessarily something that should still cause so much debt. Since I couldn't get too much information, my mind has been speculating on the possible reasons why the issue has degenerated so badly.

The lure of comfort is something that can put us in a spending trap. If we place a premium on material things, we are going to need to spend quite a substantial sum in order to maintain that illusion. Wiser people have taught themselves how to get more satisfaction out of the easier, lesser things in life and are probably even more satisfied with what they do than any other group of people.

I also looked at the possibility that the money could have been lost through unnecessary gambling or a gambling addiction. It isn't within character for my friend but there is something about the lure for money that doesn't make us act very rationally in tough situations. A couple of bad financial decisions can quickly set us down the wrong path and into the point of no return.

Conclusion

One lesson I would like to point out from this experience is that we really should be careful and honest with where we are financially and act accordingly. Money is a means to an end, and should stop being treated like the end in itself. If you need just money to determine the quality of your life you're going to need a lot of it, which might ultimately not be a successful life choice for a happy, healthy life.

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