How to Leave the Personal Finance Tempest for Calmer Waters

You'd much more likely be found perusing books on thirteenth century Scandinavian religious poets than caught even walking near the personal finance section in the bookstore. You break out into hives when you pick up a book on money management. You can hardly bear to open, much less review your bank statement. Does this sound like you? Perhaps money is a regular source of stress in your marriage. Or you just avoid talking about money at all costs, yet have a nagging feeling that you should know more than you do. Then there are all the numbers and jargon and fine print.

I admit it. Personal finance is overwhelming.

Everywhere you turn, from friends and news articles to talk shows and internet chatter, there’s differing advice on what you should do. Pay off your mortgage, don’t pay off your mortgage. Invest in this, don’t invest in that. The advice seems to be always changing. Never mind that your life is always changing!

Not only are money matters frequently overwhelming, they’re often filled with “should haves.” I should have known better. I should have known that taking out that credit card was a bad idea. I should have known what to do with my 401k. I should know what a 401k is!

If you feel like a dinghy swirling in a money maelstrom with the winds and tides constantly changing and worrisome misgivings circling like sharks, don’t fret. Calmer waters can be found!

Let’s set some ground rules to go forward.

1. No “should haves.”

Shaming yourself into action just doesn’t work, so don’t do it. The mistakes you made in the past are over and done, it’s time to move forward. Unless you are willing to forgive and be kind to yourself as you move forward, your progress will be limited.

2. Choose to look forward.

Even though I’m a financial planner, I still struggle when I hear the word “budget.” I automatically associate it with chastising myself for spending more than I planned on, for letting my husband down by not following our spending plan.

However, just because that’s where my mind goes, it doesn’t mean my mind stays there. When we discuss budgeting as a couple, I decide that I'm going to look forward instead of worrying about what's done and dusted. You can decided that as well. The past is simply your guidepost. Budgets can give you a perspective on the how you spent, but their true purpose is to look toward the future.

3. Cut yourself some slack.

No matter how organized a person is when they come into my office, it takes everyone time before their money matters are straightened out. The worst thing a person can do is expect to sit down and have their entire financial situation figured out in one hour.

Financial goals take time, much like working out and eating right. The motivation is there at the beginning, but it can slowly fade as time goes by. Accept that you’re going to make missteps and fumble along the way. It’s what you do to get back on track that determines your success. And remember, even just having the desire to understand your finances is a brave first step.

4. Give yourself credit.

Think back in your life. What are you most proud of? What is the greatest challenge you have overcome? Have you pulled yourself together after losing a job and moved forward?

Enduring the death of a loved one, caring for someone who is ill, surviving countless sleepless nights with a newborn baby or making it through a child’s rebellious teenage years are all life experiences that people go through that are far harder than getting your finances in order – I promise you.

You’re still reading. That tells me that you have what it takes to move forward with your finances. It takes courage, but I know you can do it. (Feeling like you lack that courage? Reread Ground Rule #3.)

Now that we have the ground rules in place, let’s talk about some practical steps you can take today.

Pick a (free) online budgeting tool

There are a lot of great sites out there that are free as well as user friendly. Two of my favorite tools are mint and the budgeting tool that comes with our bank (USAA). Personal Capital is another free product ranked as a top financial tool. The goal is to get all of your information in one place, allowing you to easily get an overall picture of your finances.

Worried about having all your financial info in one place? Read this article about the security of online personal finance software.

Set a timer

Decide on a time limit. It could be 15 to 30 minutes. Start with something simple, like linking your online banking to a personal finance tool or simply seeing how the program gives you reports. As you get familiar with the software you'll feel more comfortable using it.

Specify a specific date and time

Schedule a time for next week when you will spend 15 minutes looking at your finances. Nothing more. We’re focusing on baby steps. Make it a goal to sit down with your finances four times in the next month.

Involve your spouse

Talking about money with your spouse can be unpleasant and sometimes even contentious. Once you have one month of expenses listed, bring your spouse into the picture. Have a conversation with them about your spending and discuss if it’s aligned with what’s important to both of you. Be aware that talking with your spouse about money can be difficult (read more about that here and here). Bonus points if your spouse enjoys budgets and will do the first steps for you!

Stay focused

It’s easy to lose track of financial goals. Make them a priority. Put a note in your wallet by the credit card you use most often or stick a picture of that vacation spot you want to travel to on your mirror. The idea is to remind yourself daily to spend money wisely. It’s far too easy to fritter away money in small amounts here and there (that eventually add up to large sums) when you don’t have a financial goal in mind.

Get help

You don’t have to manage your finances alone. Find a financial planner to help you work through your financial situation. When you meet with a professional, make sure that you find one that makes you feel comfortable and is willing to work through your situation at your pace (read about how to choose a financial planner here).

Having a plan in place can make you feel like the king of the seas. So relax, personal money management is not as hard as you think. Follow these steps to help you grab that rudder and before you know it you'll be charting a course to financial confidence.