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How to Back-up Your Life

How to Back-up Your Life

Too often people go through life with a tunnel vision approach of how they plan to go about their daily activities, long term goals and work related endeavors. Any well thought-out strategy is successful because the planners know that “the best laid plans of mice and men often go awry”.

Life is always tossing in the monkey wrench. You should never assume that what you plan today will work for you tomorrow. We see examples of these alternative plans everywhere, yet most of the time they go unnoticed. What does this say about our priorities? By putting some focus on the areas we have neglected to plan for, we can get a better understanding of where our life priorities really stand and where they really should be.

Why is having a Plan B a vital part of success? Not only do back-up plans keep you calm in times of duress, but they also offer two important attributes that should always be accounted for before planning anything in life: flexibility and adaptability.

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Flexibility allows you to change plans without notice which means you can adapt to any situation that arises to achieve your intended goals. There are areas in life where you should always have a back-up plan. We know one thing for sure: that change is constant. You have to be able to handle change whether good or bad. Here are some suggestions in areas that may need attention.

Your Career

-Always back-up your career. This is something to consider now when the economy seems to be headed into dire straits. I know too many people who have been laid off and have no idea what to do if they don’t find another job in their field. Always find something you can do in lieu of your dream job.

-Update your resume often. Whenever you finish a big project, switch jobs or get a new title, it is important to update your resume right away. Not only will it save you time later when you need it, but it is always good to have it updated for spur of the moment career opportunities. I have seen people lose promotions because their resume was not ready to go and they took too much time to update it.

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-Save, Save, Save. Financial planners recommend that you have at the very least two months pay saved up. If you get laid off or worse, fired, there is no guarantee of a severance package. If a medical condition befalls you and you need to take an extended leave of absence, this is a security blanket that will see you through to your recovery. Even if you cannot seem to save that much, save something or meet with a planner who will help determine the plan best for you based on your current salary that will stick.

Your Finances

-Always have a retirement plan. If you are at least 30 years of age and have not opened a savings account, 401K or Roth IRA, do it now! This is especially important for those earning a living in the blue collar or hospitality industry with companies that do not offer you benefits for retirement. Retirement may seem like a long way off, but by opening an account is a step in the right direction towards ensuring your stability later on in life.

-Plan for divorce. It is not a pretty phrase to read, but let’s face it, more than half of all marriages end in divorce. Of course we all tell ourselves that we will be the exception, but it is still a financially independent and intelligent thing to keep in mind, especially for women, so that we have financial security should the marriage fall apart. It is as simple as starting a separate savings account. You can find amazing deals right now if you do it online with interest rates up to 4.75%! That is as good as a CD and you can keep adding to it for the life of the account.

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-Plan to be widowed. The last thing you need when something so horrible happens is to have to worry about finances. Whether you are 20 or 60, you should have a living will. If you need a good reason why, let’s remember Terri Schiavo. She was only 25 and the absence of a living will kept her in a vegetative state for more than a decade. You and your partner should have life insurance policies with the other being named as the beneficiary.

Also, any retirement plan should also have the spouse’s name on it in the event of a tragedy. Each of you should also have your own credit card. Too often I see spouses just added on as users to the credit cards without realizing that they are just authorized users and not actual account holders. It is important to build your own credit and not just rely on your spouse’s.

-Always insure valuable items. The engagement ring you bought your wife, the family heirlooms your mother gave you, antiques of value in your house, etc. It is important to inventory your items of importance in case of a natural disaster, fire or robbery. Get them appraised first before insuring. You might also want to take photos of the items and put them somewhere safe.

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Your Personal Records

-Always back up important records. Plan a day each month to back up your files on your personal PC, laptop and work computer. I recommend an external hard drive. What size you will need depends on what kind of files you work with each day. External drives have come down in price and are much easier to use and less time consuming than CD burning. Instead of amassing a bunch of CD’s, you can just update files on the external hard drive.

This also means scanning in and saving important documents such as birth certificates, any financial records such as taxes and of course, work files! In case of a fire or computer crash, you will still have this valuable information. Your birth certificate can be certified by a notary public without having to go through vital statistics from the state you were born. You may also want to look into a safety deposit box for heirlooms and important records. Not only will these items be insured, but they will be safer than in your personal possession.

Back-up plans should not only be applied to business projects, educational goals, but everywhere in the real world: dealing with children, spouses and social environments. It is important to pay attention and start planning the alternatives so you are not left in the dust unable to adapt because you failed to develop a Plan B. Lack of planning robs you of your flexibility because unfortunately, failure is always an option and if you fail to plan, you plan to fail. You may never use your back-up plans, but like the flood insurance you purchased, it’s always nice to know you have it.

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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