Life has an unfortunate way of spinning out of control. This pandemic we’re still in is a perfect example of that.
Certain areas of life fall out of thought, and other areas come out of no where and demand our attention whether we want them there or not.
There are things like sudden health issues or cancer diagnosis, a divorce, finding out you are pregnant, or losing a job that can really change our lives in only a couple of moments. And these things can wreak havoc on our finances.
So how do you prevent these sorts of things from happening?
Well, I wish I could tell you some secret that will prevent you from ever getting cancer or losing your job. Unfortunately, there simply is no guaranteed way to prevent things like that from ever occurring.
The good news is that there are four big areas that will take care of most everything in your financial life.
These four areas are things you can control in order to help you control your finances.
1. Your Relationships
No, I’m not saying that someone in the relationship has to specifically be in charge. I’m not saying that you’re in charge because you’ve read this.
What I’m saying is to get on the same page.
Any good relationship, friendship or romantic, is going to take some work to maintain, especially financially. Don’t let that scare you off though.
One of the ways my wife and I were able to get on the same page is by reading The 5 Love Languages by Gary Chapman.
This book was great for helping my wife and I realize how we individually enjoy being loved in our own love language as well as ideas on how to love your partner in their love language.
By meeting each other’s needs, we were able to be on the same page financially, especially because our finances should be reflecting who we are.
Here are some other ways to help maintain a great relationship to help your finances overall.
Every relationship will need some compromise at one point or another.
If you are starting a new relationship, set expectations from the onset.
Are you working really hard to pay off debt and can’t compromise on that? Tell your new partner. Have an open and honest conversation with them.
Say something like, “I am passionate about paying off my debt by this particular date. I won’t have a ton of money to always go out to eat or do big things.”
You might have a spending freeze going on or something or don’t like to spend on material things. Getting things like that out in the open from the start will set your relationship up for success later on.
Spend Money and Time
If there’s one thing that’s really hard in a relationship—especially after kids are born—it’s finding time to spend with each other. My wife and I know this feeling all too well.
At the beginning of a relationship, it’s easy to spend every waking moment together (and sometimes the sleeping moments).
As the relationship grows, you naturally start to feel like you’re drifting. There’s less to talk about. Less spark.
The fix for that is to be intentional with both your money and your time.
Spend both time and money on your relationship.
Yes, you heard that right. I am suggesting you spend money on your relationship.
So what does that look like?
When was the last time you had an extended weekend somewhere with your spouse? It’s definitely hard in the pandemic, but there are ways to do it.
I’m speaking to myself on that point too.
Extended weekends don’t have to be super expensive either. You could find a babysitter for the weekend so you and your spouse could spend some time at home together.
Have a picnic in the living room while watching a movie. Go out to a fancy dinner with the money you save from not going to a hotel.
Dress up together. Go dancing. Set money and time aside for these things.
Here are some low-cost date night ideas for you to spark some ideas.
Make uninterrupted time together no matter what stage of the relationship is in. This is how you grow as a couple regardless of how long you’ve been together.
It may take spending money to do this. And that’s okay.
Focus on Similar Goals
If you are in a committed relationship or are married already, there is an excellent chance that you will have shared goals.
Focus on those goals and work toward them together.
Do you and your partner really like traveling abroad for vacations, exploring the world we live in? You could each agree to put a certain amount or percentage into a special vacation fund.
Even if you are only starting out in your relationship, or if we are just talking about friendships, find things and values that you share. Hang out with people who value the same things as you will help out your finances tremendously.
Now, that doesn’t mean that you should just drop all of your friends or find a new partner. That simply means that it might take a little bit of work to find some common ground or similar goals.
Once you do, focus on those.
Find common ground in your finances and it’ll set you up for a very successful financial future.
I can’t stress enough about how your thinking influences not only your finances but also your life in general.
Positive thinking is a gateway to many great things in life. For that reason, it’s important to get your mindset right in order to benefit your finances.
Reset the Way You Think About Money
How you view money is just as important as—if not more important than—what you do with your money.
Ultimately, how you view money will determine what you do with it.
If you view money as a status symbol, you will look for ways to flaunt how much money you have and how “successful” you are.
Luxury vehicles, million-dollar homes, designer clothes—all of these are fine if your mindset on money isn’t skewed, but they can compound the issue if you have an incorrect money mindset..
If you view money as a tool to help people, you’ll look for ways to use it for that purpose.
Giving to those in need or to charity, paying to further educate yourself, or helping a friend pay off their student loans are some ways you may use your money as a tool.
If you think about money correctly, it’ll help you use it for purposes that will benefit your finances and your life.
You can take a number of steps to reset the way you feel about money.
You can try giving yourself an artificial pay cut. Setting up automatic savings or automatic debt payments will help in achieving that.
Giving yourself a pay cut simulates needing to pay closer attention to what you do with your money.
Money is just a tool and will magnify who you are.
An artificial pay cut forces you to figure out what it is you value and what you want to spend your money on.
Being generous will also reset the way you think about money. When you begin using money to bless others, it helps you see money for what it really is—a tool.
Managing your money to align with your values is the endgame of resetting the way you think about money.
Always Stay Positive
Helen Keller once said, “Keep your face to the sunshine and you cannot see a shadow.”
Helen Keller was both deaf and blind but that didn’t stop her from looking on the bright side—toward the sun—and achieving great things in her life.
Despite her disability, she was the first deaf and blind person to earn a bachelor of arts degree. She was a world-renowned author and she’s a hero to those with similar disabilities across the world.
Staying positive in what can be a largely negative world can be one of your biggest assets in finances, career, and life.
Helen Keller could have completely given up hope but she didn’t. She may have even wanted to at times, but there is a (not-so) secret to her staying so positive. She had outside help.
Anne Sullivan, Keller’s teacher, was able to break through the isolation that her disability can cause to allow Keller to truly flourish. She helped Keller stay positive.
If you’re anything like me, it can be hard to stay positive, especially when facing overwhelming odds.
There are quite a few things that you can do to stay positive though. Some of the things I do include:
- Listening to podcasts
- Watching inspirational TED Talks
- Reading blog posts or Medium posts
- Spend less time with negative people
- Spend time with God
- Surround myself with positive thinkers
- Read books
A couple of books that I’ve really enjoyed are The One Thing by Gary Keller and Essentialism: The Disciplined Pursuit of Less by Greg McKeown.
Since I believe that finances should reflect who you are and what you value, these books have really spoken into me a lot. They’ve given me permission to say “no” to things, focus on what I value most, and get rid of the things I don’t value. Highly recommended!
The list above is only some of the things that you can do to help you keep a positive attitude. You can do some of these or all of these. Pick the ones that work for you.
For example, watching a TED talk may do nothing to keep you motivated. You might choose to listen to some relaxing, or even upbeat, music instead.
Find out what keeps you thinking positively and keep that tank filled. This will help your finances by keeping your attitude right when things go both poorly and swimmingly.
As a famous fish once said…
“Just keep swimming.”
Have an Abundance Mindset
There are two types of mindsets that are prevalent in personal finance—a scarcity mindset and an abundance mindset. Their descriptions match their names.
A scarcity mindset is when you consistently think there isn’t enough.
This doesn’t apply to only money. This could apply to time or any number of things in your life.
This tends to lead to negative thoughts, missed opportunities, and keeping money and other resources to yourself out of fear of not having enough.
An abundance mindset is the exact opposite. There is no worry about not having enough.
This can lead to more generosity since you believe that you’ll be able to earn enough to cover what you’ve given away.
It can also lead to less fear of not having enough if a new job or entrepreneurial opportunity opens up. This means you won’t miss that opportunity because of your mindset.
Which one do you have?
Some ways you can nurture an abundance mindset are to:
- include a budget for random acts of kindness
- give to your church or a ministry
- give to charities
- budget for fun money
- pay yourself first
Again, not all of these will work for all of you. Try out one or more of these and see how they work.
If they work well, keep it around. If it doesn’t work, chuck it! Pitch it! Get rid of it! Indiscriminately!
Do what’s best for you.
This list is by no means exhaustive either. If you think of or stumble upon a way to help you build an abundance mindset, give it a try!
Having an abundance mindset will help your finances in more ways than you can imagine, especially when you pair it with managing your money well.
3. Your Health
With medical premiums continuing to rise with no end in sight, there hasn’t been a more important time than now to do what you can to stay healthy.
There are three main things that you can do to help you stay healthy.
It is so important to stay active at any age. Exercising and getting your heart rate up helps burn calories, strengthen your heart and lungs, helps maintain your metabolism, and can prevent arthritis.
It will also help you maintain a healthy weight.
It’s also easier if you keep on it now before things get worse. The longer you let your body go without exercising, the harder it is to get back into it.
For the longest time, I was very “dormant” athletically speaking. I walked around all day at my previous job, which was fine.
But after that, I would come home, sit on the couch, go to bed, or play a video game and just veg.
I was also tired all the time so I had zero motivation to get my body moving. This changed only slightly when I got a new job more than five years ago.
Now, I actually exercise fairly consistently. I do a lot of weight training which builds muscle and gets my heart rate up. I was really getting tired of getting winded by small bursts of energy that really shouldn’t get you winded.
What I’ve come to realize is that exercising and keeping my body limber and healthy will help to prevent a lot of diseases and ailments that can cost a ton of money down the line.
Some diseases can’t be prevented and they just happen. But there is a ton of evidence and research accessible with a simple Google search that says the healthier you keep your body, the less likely you are to have medical problems down the line.
Diabetes and heart disease are two things that can be delayed or even prevented entirely by staying active.
Exercise. Keep your health and keep your money.
Eat Healthy and in Moderation
I remember in my late teens and 20’s I would eat whole boxes of Mac N Cheese for lunch, whole frozen pizza’s for dinner, and then a bunch of cookies with a big glass a milk while laying in bed to go to sleep.
Aaahhh. Those were the days.
NO! Bad Tim!
That was terrible and I was lucky to only be around 20 pounds heavier than I am now (I still have a little bit of weight to lose, too). You live and learn I guess.
It’s been a struggle, though. When I applied for life insurance at the peak of my rough time as a restaurant manager, my results did not come back very good.
I had really high cholesterol, my triglycerides were literally through the roof, and the blood test basically confirmed how I felt…like crap.
At this point, I was consuming a ton of calories—a lot of it sugars—and not making smart decisions with my food. I was eating fried food all of the time and consuming 300-400 grams of sugar per day in the form of chocolate milk cartons and coffee creamer.
Because of my poor choices with food, I still have what feels like a laundry list of stomach problems. I am bloated nearly half the time I’m awake. Heartburn is my closest enemy. I get nauseous if I’m having a bad stomach day.
All of these things that I’m trying to fix now with a better diet and physical activity could have been prevented by making better food choices earlier in life.
Now, I lose time by trying to figure out what I can eat based on how I’m feeling. It’s more than planning out a simple diet.
I also lose money because I have to take pills to help with stomach acid production while I’m trying to get mine under control.
And the future? Well, if I let my heartburn and stomach problems continue, I could end up getting esophageal cancer.
Not only will that cost a lot of money to fight, but it may cost my life.
Better to spend a little bit more to eat healthy now than to spend a lot more later to fight diseases.
If you struggle with health based on your nutrition habits, I implore to start now to change your eating habits. You’ll feel much better, and you will save yourself a lot of money in the long run.
Take Advantage of Wellness Checkups
When I was eating poorly, the only reason I actually found out what it was doing to me was by applying for life insurance. Why? Because I wasn’t taking advantage of wellness checkups.
When the Affordable Care Act was introduced during Barack Obama’s presidency, it was required that eligible preventive visits be covered 100% by insurance companies.
If I was taking advantage of these wellness visits, I could have known sooner that my diet was probably killing me. I could have made changes before having all of the stomach issues I have currently.
Combined with staying active and eating healthy, wellness checkups will help you stay healthy and save you money.
Regular checkups can even catch life-threatening diseases early enough so, one, you won’t die, and two, you will save more money by lessening the number of treatments you need because it was caught early.
Now keep in mind, even though preventive care and screenings are covered 100%, treatment is usually subject to your plans other medical terms such as a copay or deductible. That’s a small price to pay for catching potential life-threatening diseases early on.
Your credit score can do a lot of things for you. Your score has a big effect on what your interest rate will be when applying for things like mortgages or car loans.
It will also determine if you can even obtain those types of loans.
Basically, the higher your score is, the less of a risk you are considered to lenders.
This can save you money on interest especially, but it also gives you access to reward credit cards and other things that you can use to save or earn money.
So how do you control it and build it up?
Review Your Credit Report
Your credit report is different from your credit score. Your score is a numerical value based off of your credit history while your credit report is a documentation of that history.
Your credit report shows you what credit accounts you have, inquiries to your credit, as well as any collection notices. For more info on what exactly is in a credit report, you can click here.
By law, each of us in the United States is allowed one free copy of our credit report every year.
It’s a smart idea to review your credit report each year to make sure there isn’t anything fishy going on. If you do find something weird on your report, you can dispute it and potentially get it removed.
This can also protect you from full-on identity theft and allow you to keep your money without a fight. False information on your credit report can also cause your score to dip, which means higher interest rates if you do need a loan.
To access your report, the best place to go is annualcreditreport.com. Other websites may charge you a fee or try and upsell you on other products.
Don’t Utilize Too Much Credit
One of the factors that directly drives your credit score is your credit utilization ratio. This is the ratio of how much outstanding credit you have versus how much total credit you have access to.
For example, if you have a total credit limit of $4,000 (not on one card but total) and you are using $2,000, that means you are using 50% of your total credit limit.
So how much should you utilize?
Many personal finance advocates quote 30% of your total credit as the threshold. I’ve also heard a third all the way up to 50%. So which is correct?
Unfortunately, there isn’t a hard rule or cutout on how much you can use without it negatively affecting your credit score.
30% is a good rule as it gives you something to shoot for. It also keeps you from a financial disaster by having too much debt to pay off.
However, if you’re a little bit over that, it shouldn’t affect you negatively.
I personally shoot for no more than 30% to 40%. I’ve had a FICO credit score in the mid-700’s to mid-800’s for most of my “credit life.”
So how can you keep your credit utilization at the 30% to 40% threshold or lower?
For starters, you can pay off your debt. Here are 17 great ways to do that. Paying off your debt will help you lower the amount of credit you’re utilizing and will have a positive impact on your credit score.
You can also request a credit limit increase from your lenders. In my experience, most borrowers only require a reason why you’d like the increase to request it. Then they’ll review your account information and let you know their decision.
Be advised that this could result in what’s called a hard inquiry on your credit report, temporarily lowering your score.
This means that it’s best to not do all of your credit cards at once to lessen the hit on your report.
Lastly, you can apply for a new credit card and then not utilize it at all.
Again, this will result in inquiries on your credit report, but it may be worth it to take the small hit in the short term.
Being approved for a new credit card may give you a bigger increase in overall available credit than a simple credit limit increase on an existing account would. Your mileage may vary.
Pay Off Your Balances in Full Each Month
Another thing you can do to help control or build your credit is to pay off your balance in full each month.
One of the best ways to do this is to use a credit card to pay your bills each month. You know all of your bills need to be paid regardless of using a credit card so you should have this money set aside already.
Simply put your bills on your credit card, and then use the money you’ve set aside for your bills to pay off your credit card.
Bonus points for using a reward credit card.
You can also start smaller if you’re trying to get over any bad credit card habits.
You can start with one bill or category of budget and then work your way up if you want. Otherwise, you can continue to make very small purchases for needs, and then pay it off each month.
Your finances can be directly influenced by other areas of your life.
By controlling your relationships, your mindset, your health, and your credit score you set yourself up for financial success as well as potentially saving you a ton of money over the course of your life.