Finding focus when your finances are out of control.

Are your finances completely out of control? Are you spending more money every month?

Savings. You should have at least one month of income saved to your savings account. It is important to plan ahead for emergencies. The first step to being able to get your finances in control is to plan ahead for emergencies. When you have things come up, it is so much easier if you have a plan and a savings fund. While you’re building your savings account, make sure you are staying current on your credit payments.

Debt. Now, that you have some money put aside for emergencies, you can shift your focus to your debt. You are going to pick one debt to work on a time. Then, you will use the snowball method to pay off your debt sooner. To pick your first debt, you can choose the smallest balance or the largest interest rate. Most people say it is best to start with the largest interest rate. But, if you start the smallest balance, you can see your effort sooner. So, I prefer to start with the smallest. Hopefully, you have a small debt that you can pay off within a few months. Then, you take the payment you were making to this debt and add it on to your next debt. Make a simple spreadsheet in google sheets to see your efforts.

Retirement. Retirement savings is very important. The sooner you start putting money away for retirement, the more money you will accumulate in your retirement account. However, if you’re spending more money than you are currently making, retirement savings is not the smartest route for you. Get a good savings account started and pay off a lot of your debt, then start saving for retirement.

Staying focused on one of these areas is the very best way to get control of your finances. Once you start to have control in one of these areas, be proud of yourself. Even if you’re not where you want to be, you are still doing great by staying focused and achieving one goal.

I always compare it to losing weight. One area is like ten pounds. You can’t expect to lose fifty pounds in a month. In the same way, you can’t expect to turn your finances around in a week. It takes long, focused effort to lose weight and control finances.