Last updated on October 31st, 2019
Too many people are deep in debt, living paycheck to paycheck, and struggling to make ends meet.
If you’re reading this blog, you’re probably one of them.
But don’t worry, this is a judgement-free zone.
We’ve made our share of poor financial decisions and we’re still working toward getting out of the hole we dug ourselves.
It hasn’t always been easy but we’re finally on the right track and we owe it all to the simple rules below.
If you make these simple changes to your mindset, you’ll suddenly find yourself so much happier.
Stop Comparing Yourself To Other People
How much time do you spend scrolling through your Facebook feed checking on what everyone else in the world is up to?
Does it usually make you feel better about yourself or worse?
I’m guessing worse.
You probably look at other people’s updates and think to yourself “Oh it looks like they’re having so much fun. I wish I was there.”
Or “Wow, look at their house! I wish mine was that nice.”
What a waste of time and energy.
First of all, if you want to change your life or achieve something you don’t have now you need to actually get off your butt and do something about it.
Sitting around looking at Facebook all day isn’t going to get you anywhere.
Second, you need to remember that what you see on Facebook is far from the truth.
Your friends only put what they want you to see on Facebook. That’s why they’re always laughing and having a good time, or traveling to some great destination spot.
They want you to think their life is perfect. But it’s all a lie.
Most people don’t share pictures of themselves when they first wake up and their hair is a mess and they have no makeup on.
You see pictures of their kids all perfectly dressed and hugging like they couldn’t live without one another. You don’t see what happened five minutes later when the kids were bickering and at each other’s throats.
Stop trying to live up to some false standard of perfection that has no basis in reality.
Just enjoy what you have. Because odds are that all of your Facebook friends are looking at your posts and feeling jealous of you too.
Be “All In” In Whatever You Do
People are so easily distracted these days. The other day we were out for a family dinner and at the table next to us there were four people (two couples on a double date) and all four of them were on their smartphones.
Why even bother going out together if you’re going to keep your face buried in your phone the whole time?
When you’re at work, focus on doing your job the best you can. It will be noticed.
If you’re working on a side gig, don’t do it while you’re sitting in front of the TV. Set aside time for it and give it your full attention.
When you’re out to dinner with your spouse or playing board games with your kids, keep your smart phone in the other room.
Stop trying to multi-task and dividing your attention in a hundred places. Whatever you’re doing at the moment, give it your full focus and be “all in”.
Prepare Yourself For The Unexpected
Bad things happen to good people.
It’s not a happy thought but unfortunately it’s the truth.
One minute you’re minding your own business trying to get ahead and then BAM! Life kicks you in the shins.
It has happened to us more than once and you can bet it will happen to you. So the smart thing to do is protect yourself with a good pair of shin guards.
I don’t mean that literally of course (though with 3 kids playing travel soccer we have plenty of them around the house).
What I mean is that you need to expect the worst to happen and prepare yourself for it as best you can. You need to be adaptable and ready for whatever life decides to throw at you.
That means taking good care of your body to ward off disease and injury. It means having enough insurance to take care of your family if something happens to you.
It means having an emergency kit packed and ready to go at a moment’s notice. And it means building up a healthy emergency fund to cover unexpected expenses.
Spend Less Than You Earn
The secret to building wealth is not all that complicated and it really isn’t much of a secret.
All you have to do is spend less money than you earn.
If you do that one thing your net worth will continue to rise and you will build some serious wealth.
Unfortunately, just because the secret to building wealth is simple doesn’t mean it is easy.
If you don’t follow a budget and you don’t know where your money is going you can easily end up spending more than you realize and dig yourself deep into debt.
Create a budget and follow it. Track your spending so you know where your money goes. Invest any leftover money towards your future.
If you do those three things you’ll be amazed at the results.
Learn The Difference Between Needs And Wants
If you want to take control of your finances you need to understand the difference between needs and wants.
Needs are things you can’t live without, such as food and a roof over your head.
Wants are things that are nice to have but that you can live without.
Wants are also like upgrades. They sure are nice to have but you’ll pay a premium for them.
Here are a few examples so you can get the idea:
You need food to stay alive, but you want to go out to eat at a restaurant instead of cooking at home. Going out to eat will cost far more than eating at home.
You need a car to get to and from work, but you want the high end model with leather seats and a moon roof. You can bet your butt you’ll pay more for those fancier features.
If money is tight and you’re looking to cut expenses, look to scale back some of those things you want but don’t really need.
Build Multiple Streams Of Income
Living paycheck to paycheck sucks. Especially when your bills grow at a faster rate than your take home pay.
And if something suddenly happens to that income stream (like a layoff) you’ll be in deep trouble almost immediately.
That’s why successful people have multiple streams of income.
They know that putting all of your financial eggs in one basket is asking for trouble.
So how do you start creating multiple streams of income?
There are plenty of options to choose from.
You can start your own small business, invest in dividend paying stocks, rent out part of your home through Airbnb, or start your own blog to make money.
When you have multiple streams of income, you’ll be less reliant on your salary and better able to weather any financial storm that comes your way.
Remember Credit Cards Are Your Enemy
Credit cards are sneaky.
They act like they’re your friend and they promise to get you all kinds of cool stuff and let you live the good life.
But then they kick you to the curb and leave you with shoe prints all over your face.
This is one we lesson learned the hard way. We always thought we were smarter than everyone else and that we’d use credit cards to our advantage.
We’d take advantage of the convenience credit cards offer and earn lots of rewards points in the process.
But when we ran into unexpected expenses we ended up carrying a balance and then it grew quickly out of control.
And once you find yourself in credit card debt it can be very difficult to get out because so much of your payment goes to paying interest.
If that sounds familiar it’s time to start digging your way out. Stop using your credit cards, cut your expenses wherever you can, and put whatever extra money you have towards paying down your debt.
Develop Good Habits
We are what we repeatedly do. Excellence, then, is not an act, but a habit. – Will Durant
What do you choose to do when you get home from work every night?
Do you open a bottle of wine and crash on the couch watching TV? Or do you use your free time to get some exercise or build up a side business for yourself?
The habits you’ve already formed have a profound influence on your life and if you want to make a change you need to break down those old habits and form newer, more productive ones.
We all have parts of our life that we wish we could change, but changing deeply ingrained habits is easier said than done.
To gain a greater understanding of why some bad habits can be so difficult to break, try reading The Power of Habit – Why We Do What We Do in Life and Business by Charles Duhigg.
I first discovered The Power of Habit through an excerpt that was printed in the New York Times. I found it so fascinating that I immediately hopped onto Amazon and ordered a copy.
The Power of Habit will help you identify destructive habits and the hidden cues that are behind them.
There is no magic switch that will break bad habits for you. True change will take time and effort, but the book does provide a step-by-step action plan for identifying and reshaping your habits.
See The Glass Half Full
Are you an optimist or a pessimist?
Research shows that optimists tend to live longer and are less likely to succumb to depression than their pessimistic friends.
That’s because pessimists tend to internalize and blame themselves when things don’t go right.
If a pessimist applies for a job and doesn’t get it, she assumes it is because of some fundamental flaw in her character. No one likes her and no one will ever hire her, or so she thinks.
An optimist, on the other hand, shrugs it off as a temporary setback. She didn’t get the job because there was a more qualified candidate and nothing more.
If you always see the glad half full, you’ll have more energy and you’ll be less likely to give up when the going gets tough. You’ll also be more fun to be around. Who wants to hang out with a grump?
Remember What Is Most Important
We all get pulled in so many directions.
Work, errands, children’s school and activities, food shopping, and a hundred other things for you to do.
It’s so easy to get bogged down in all the little details of life that you forget what’s most important to you.
But through it all we need to remember to enjoy life and our loved ones while we have them.
So many families are torn apart over money and it is important to remember that money isn’t everything.
Maybe you’re in debt and trying to dig your way out. You can do without a lot of things, but I’d advise not to go so overboard cutting expenses that you forget to enjoy life.
Even if you have debt, you can still scrimp together some money to go on vacation or pay for a sport of activity that your children will enjoy. It’s important to create those memories to look back on.
Now, I’m not saying you should throw caution to the wind and spend whatever you want with a “you only live once” attitude.
I’m just saying you should stop and enjoy life a little once in a while too.
Mike Collins has been working in the financial industry since 2002 and is a self-proclaimed money nerd. He’s written for numerous personal finance websites and been featured on sites such as MarketWatch, Fortune, and Business Insider. Mike created Wealthy Turtle to give readers the tools and knowledge to manage their money like a rock star.