How to Thrive in Uncertainty

Photo: KenSBrown

Even a casual glance at the headlines will tell you we’re living in especially uncertain times. But don’t lose hope. There are ways to thrive, even in times like these. (See also: Emergency Plan: Better Than an Emergency Fund)

Control What You Can Control

Psychologists say feeling in control is one of the essential wellsprings of mental health. We can’t control wars, the weather, or Wall Street, but there’s much that we can control, so that’s the place to focus.

Plan to Succeed With a Budget

How do you feel about the idea of using a budget? Excited? Happy?

I didn’t think so.

Non-budgeters use words like “restrictive,” “rigid,” and “constraining” to describe budgets. However, people who actually use one say a budget helps them feel “in charge” of their money and that it keeps them “in a position of knowledge and control.”

Especially when times are uncertain, it feels good to be on top of where your money is going each month.

As explained in my Budget Quick Start Guide, there are four steps to using a budget:

  1. Estimate where your money is now going
  2. Develop a plan for how your money could be used more effectively (see the Recommended Spending Guidelines for different size households and different incomes at the previous link)
  3. Track your use of money
  4. Analyze where your money actually went at the end of each month and make any necessary adjustments.

If you don’t currently use a budget, give it a try. You’ll soon find yourself feeling much more in control of your finances.

Create a Safety Net

Even in good times, life is filled with uncertainties. Unexpectedly expensive medical issues, home or vehicle repairs, and more can pop up at a moment’s notice. The people who are best prepared are those with an emergency fund, preferably stocked with six months’ worth of living expenses.

If that sounds like a lot, just start where you can. Open a separate savings account. Then set up an automatic transfer each month from your checking account to this savings account. Start with $25 a month if that’s all you can afford. The key is to start.

If you have any debt other than a reasonable mortgage, build an emergency fund totaling one month’s worth of essential living expenses and then get focused on getting out of debt. If you’re already out of debt, build your emergency fund up to six months’ worth of essential living expenses.

Ditch the Debt

If you’re carrying a balance on a credit card, commit today to stop going any further into debt. Take your credit cards out of your wallet or purse so they’re not with you when you go shopping. Cut them up, or put them in a block of ice if you have to. Do whatever it takes to make it make it as difficult as possible to take on any more debt.

Next, fix your payments. An important thing to know about credit card debt is that if you stop going any further into debt and you make the minimum payments required by your credit card company each month, then each month you’ll be required to pay less and less.

It isn’t kindness on the part of the credit card company; it’s math. Your minimum required payment is based on a percentage of your balance. So if your balance is going down a little each month, so will your required minimum payment.

Making this declining minimum payment will keep you in debt for approximately…forever! However, if you simply pay the same fixed amount each month, you’ll really speed up the process of getting out of debt.

Even better, see if you can pay more than the fixed minimum.

Stay Employable

There’s no such thing as guaranteed employment anymore, but keeping your skills on the leading edge will go a long way toward staying as employable as possible. If your employer offers tuition reimbursement, pick up a night class in your field. At very least, make sure you're reading the latest books and leading blogs in your field.

Give Some Money Away

In uncertain times, it’s natural to narrow our focus, thinking mostly about our own needs and even becoming fearful. Regularly contributing some money to a cause or organization we believe in can go a long way toward getting us out of those ruts. Giving money away takes our focus off ourselves, keeps us mindful of other people’s needs, and makes us feels good to be part of something bigger than ourselves.

What other steps are you taking to thrive during uncertain times?

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Guest's picture

Two things:
If your credit cards are maxed and you make the minimum payment, there is a point at which you will begin to owe more rather than less, due to interest. Then there will be an "over the limit" fee, which will make you further in debt, and will make your payments seem senseless.
Secondly, anyone looking for a place to give away some money and truly feel great about it should check out Love Drop.

Guest's picture

Cathie's right, paying the minimum is an eventual brick wall - but if it's all you can pay, make sure to pay every month! It's certainly better than just ignoring it.
Good blog, very timely!

Guest's picture

I so wish we had followed these tips before my husband lost his job which led us down the path to foreclosure and then bankruptcy. But, hindsight... Anyway, the best thing we did was "Ditch the Debt". We haven't relied on credit in 3 years. In 3 years we have managed to pay down our remaining debt and not add to it. This has been huge and much easier than we anticipated.

All the lessons in the last couple of years have been hard-earned, but we've grown so much. As people and as a couple.

Oh and giving money away. I totally agree. It helps to put things in perspective. Giving is so rewarding. Our favorite charity is Corazon de Vida... they take care of the orphans in Baja California. We stopped donating while we were fighting foreclosure. But this post has me thinking it's time to start again. We've given money here and there for causes- disaster relief, cancer research... but nothing is in our budget. Time to put it back. - Stephanie Walker

Matt Bell's picture

I just want to clarify that as a starting point I was encouraging people to "fix" their minimum payments on the amount due this month as opposed to paying the minimum required by the credit card company. Assuming you take on no more debt, the credit card company's minimum will decline a little each month. To be sure, that's a bad way to go. But if you fix your payment on this month's minimum, continuing to pay that amount each month even when the actual required minimum is less, you'll really speed up the process.

For example, if you have $6,000 on a card charging 18% interest and requiring a minimum payment of 2% of the balance, paying the credit card company's declining minimum will take over 42 years to pay it off! But if you just fix your payment on this month's minimum ($120), you'll be out of debt in less than 8 years. Better to pay even more than $120, but at very least, stop going any further into debt and fix your payments.

Guest's picture
Vanessa Haskin

Hello, is it possible to buy a print of this photo by Ken S. Brown?

Meg Favreau's picture

Hi Vanessa,

You'd need to contact Ken directly about that, which you should be able to do through Flickr:


Guest's picture

I think it also helps to have a strong longterm view as well as a plan that you work consistently. For many people this is preparing for retirement. That may serve as life's lighthouse, that no matter what is happening in the shortrun you're always focused on--and working toward--a better tomorrow.