Five Steps To Getting A Handle On Your Money

August 2, 2021

I think I’ve been meaning to write this post for, oh, months, but kept thinking that I’d written something similar recently. Well, I just went back and checked and I sure haven’t! Maybe it’s because I talk about this stuff with others given any opportunity and additionally think about it lots:) Anyway, it’s been a long time since I wrote some practical steps to getting a handle on your money so here they are in all their glory.

Get everything on paper.

Put all your numbers down on paper. I’m talking all your accounts and their balances and every single expense including the ones we all like to forget about. Be ruthless, be very thorough and, if you’re feeling a little discouraged, keep going and tell yourself that this is the beginning of a new, happier money chapter for you. It might seem scary but I promise it’s scarier to not know and be afraid of the unknown. It’s like, as a kid, being afraid of what’s under your bed. It feels like the scarier thing to shine a light down there and risk seeing the monster. But until you do and realize there is no monster, all you are is afraid.

Simplify your accounts.

I have written about this in this post. And, shockingly, I don’t think I’ll elaborate here. Seriously. I’m not going to say anything more. Except that this would include managing several credit cards to get points and having to stress about payments and point balances. Even if you pay off your balances, the more you juggle, the more you juggle. Profound, I know. And the more bowling pins you have flying thru the air, the higher your probability is of having a pin drop. Okay, now I’m done on this one:)

Stop multitasking.

Just take one lil’ step at a time. Stop trying to do all the good things at once. I can vouch for the power that comes when you focus on one thing. And the absence of that power when you are trying to do too much at once. Stop simultaneously saving for several different things, investing, paying down all balances, saving for a house, etc. Focus your energies. Focus people! Steps that worked for me and lots of others:

  1. Stop using a credit card unless you have faithfully been paying it off every month. It is standing between you and a frank assessment of what your lifestyle really should be. Sidenote: one thing I really like about You Need A Budget (YNAB) is how they treat credit card spending. I don’t personally use a credit card, but my clients appreciate it and I think it’s just so dang smart. You can spend on your credit card but you have to use real money from the budget; the money gets moved from the appropriate budget category (i.e. Clothing) to a category for Debt Payment. Brilliant!
  2. Quickly save $1,000-2,000 as an emergency fund buffer between you and life. This prevents the minor emergencies of life from derailing you again.
  3. Once you have this amount, throw everything extra toward your smallest debt, making only minimum payments on everything else.
  4. Once your smallest debt is paid off, start on the next smallest and so on.
  5. Save for the fun stuff and pay off your house. The steps become less defined when you’re debt-free and that’s because everyone has different goals and life situations. These might include saving for a down-payment, paying off a home more rapidly, saving for a replacement vehicle, saving for a big trip. But this is all good because, by this time, you will be in the driver’s seat of your money and can handle doing these smahhht money things without being sabotaged like before.

Start where you are

Don’t wait for the new raise, the new year, the new you, or an overwhelming amount of motivation to start acting different with your money. Shoot, you don’t even need to wait for the new month when you use a tool like YNAB. Stop the pattern of wasting money—even the money you currently have needs organizing! A new year might be months away and the next raise even further than that. The longer you put it off, the longer you’ll feel stress and the more affected you’ll be by emergencies. So just start.

Actually budget.

As you know, I love budgeting. Oh, you didn’t know? Well, I do!  And I strongly recommend YNAB as the budgeting tool that made all the difference for me. One day maybe they’ll pay me for all this positive press, but even if they never do, I’ll keep plugging them.

Having a tool to organize money makes all the difference. I’m not talking a hypothetical “this is what I think/wish my monthly expenses are.” I mean, planning how you are going to use your current money until you get new money and then tracking your spending within those categories. And when you get new money, it gets organized and you keep tracking. And you just go round and round and round again!

Build in habits for budgeting success. Schedule budget reviews with your spouse or a family member or at least yourself. Schedule time to reconcile your budget to your checking account so you know your budget reflects reality. Don’t let receipts pile up in a wallet or purse. Look at your budget before you spend.

In happy conclusion…

I know these steps/points of advice are nothing crazy complicated. Money really isn’t complicated, but dang, a lot of us make it so. So, as someone who finally got my money act together and am reaping the blessings and less-stress of doing so, I dare you to give these a whirl and share what you learn along the way!  In fact, I double-dog-dare you.

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