Where Do I Start?

Over the years, one of the most common questions I get is “Where do I start?” Many of us did not have parents who taught us about how to manage our finances. Schools generally don’t give more than basic economics, which isn’t very helpful in my opinion. Let’s give our parents some grace, most couldn’t teach what they didn’t know themselves. School? Well, is it their job? That’s debatable, but I certainly didn’t want them teaching my kids that “debt is a tool” or any of that nonsense that has crippled our young people financially.

So, where do you start? 

The very first thing you need to know is where your money is going. Not in theory, in reality. TRACK YOUR SPENDING for one month to figure out what your actual expenses are. Guessing won’t work. Estimating is worthless. Track it. Every purchase. Every account, whether credit, debit, savings, checking. This is vital information and your spending plan will not work without this information.

Create a spending plan(budget) based on your actual expenses. There are many tools out there and it doesn’t matter what system you use as long as you LIVE BY THE NUMBERS YOU SET. Some prefer a pen/paper spending plan which is fine as long as you’re updating the amount spent regularly.  Ramsey+ offers an online budget that some of my clients like. YNAB is also a favorite and Mint has some good tools as well. I have used YNAB for years and I love it but find what works for you, or you won’t use it!

If you’re in debt, go on a 30 day spending hiatus. Put the credit cards away (or cut them up) and commit to only paying your bills and buying the absolutely necessary items, like milk and gas for your car. You can pay off a lot of debt in 30 days if you do this one thing!

Pay off your consumer debt! Use the debt snowball. List your debts smallest to largest. Trust me, Dave Ramsey’s debt snowball method is the best. It creates momentum and gets you excited about the process. 

If you have any questions or need help getting started, let me know!