No one knows why the Surfside building fell, but a CPA knows how it got to that point.

As I write this, 16 people have died and 150 people are still missing after a 12-story condominium tower collapsed in the town of Surfside, Florida.

Because a security camera recorded the collapse, and because it’s such a tragic story, many Americans have now heard of Champlain Towers South. What they haven’t heard is that they could be next.

I’m a CPA, not a structural engineer. So I’m not presuming to know why the tower fell, nor am I predicting that your building may also fall. Yet I do know something about how these catastrophes happen – because they often start months or years earlier with shortsighted financial decisions.

For three decades, I’ve counseled individuals and businesses about managing debt. I’ve launched businesses in multiple countries that do the same. I’ve written two books on the topic. I can say this with near certainty: Most man-made disasters start with financial procrastination and poor planning.

In the condo collapse just north of Miami, news reports show the residents and leadership of Champlain Towers South Condominium Association knew there was a problem as far back as 2018. They didn’t ignore the problem. To the contrary, they argued endlessly about it.

USA Today reported this week about a seven-page letter from the condo association president to residents. Written in April, it “suggested that millions of dollars in needed repairs had been a subject of frustration among residents,” the newspaper said.

Here’s a line from that letter: “We have discussed, debated, and argued for years now, and will continue to do so for years to come as different items come into play.”

Ominously, they didn’t have years to argue. They had weeks. And it’s fair to assume they were still debating the cost of these repairs right up to the day of actual collapse.

This doesn’t make them bad people. It makes them…people.

Whenever we are faced with a steep repair bill – whether it’s for our home, our car, our appliances, or even our health – we often balk. Several factors come into play, and they’re often a mix of the financial and psychological.

First, individuals and organizations hate paying for repairs. We want to buy new things, not fix old things. (Just look at Republicans and Democrats debating an infrastructure bill – again.) There’s nothing particularly exciting or rewarding about routine maintenance.

Second, very few people, groups, or governments prepare for emergencies. We’re an optimistic species, and while we intellectually know disasters can befall us, we don’t think it will be any time soon. We also expect to have fair warning. Sadly, not all tragedies are like hurricanes, which take days to approach and can be tracked with radar.

Third, we certainly don’t budget for emergencies. The expression about money “burning a hole in your pocket” is a cliché precisely because it’s true. If you live in a condo, do you want a special assessment to repair some pipes? Or do you want new paint and landscaping? One can’t be seen, the other can.

This might explain why one of the greatest frustrations among personal finance experts is convincing Americans to create – and not raid – an emergency fund. In January, CBS News reported that 6 in 10 Americans can’t cover a $1,000 emergency in their lives.

Yes, the pandemic seriously depleted income and savings, and yes, income equality has grown over the years. Still, that doesn’t explain why most Americans have never been able to cover an emergency, and why the best-selling vehicles in this country are pricey SUVs and why we still seem to find the money to take expensive vacations and buy expensive clothes.

The Champlain Towers South Condominium Association is composed of people who spend their own money like their condo spent its money. While we’ll learn more from reporters and government officials about this particular disaster, I’m certain it will happen again, and just like USA Today described.

Or perhaps this is the proverbial wake-up call, and we’ll all realize that every individual and organization needs a robust emergency fund, as well as a routine maintenance fund. Otherwise, more lives will be ruined, in places other than Surfside and in ways less public than a building collapse.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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