7 Steps to Getting Your Financial House in Order

"I need to get my act together!"



You’ve probably uttered a variation of this statement over the years, and you’re not alone. Many of us experience that haunting compulsion to accomplish something big as we hit a certain age.


Things like deciding which colleges to apply to in your late teen years, picking a career path in your early 20s, or determining whether to settle down and have kids in your mid or late 20s.


And now that you’re older, maybe your attention has changed to getting your financial house in order.


What's A Financial House?

A financial house is a metaphor for all the aspects that constitute your overall financial wellness.


This can include your budget, the info found on your financial reports, any debts you have, and your retirement planning and accounts.

While you might be on top of some of these “rooms,” you might neglect others. Or maybe, all of the rooms in your house are due for housecleaning. But even if your financial house appears to be in good shape, a quick touch-up never hurt nobody.

Having your financial house in order can help you spend less, save more, and work more efficiently towards achieving your financial goals.



7 Steps to Getting Your Financial House in Order


The one thing that keeps many of us from getting our financial house in order is not knowing where to start. Budgeting apps, Excel spreadsheets, accounting software – the overwhelm is real.

If you fall in this category, follow this step-by-step guide to get your financial house in order:


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Tip #1 - Take Stock of Your Current Financial Situation


In the words of Socrates, “the unexamined life is not worth living.”


It pays to get up close and personal with your finances. But you can’t organize what you don’t know you have.


If you haven’t examined your overall finances lately, now may be a good time to track down all your accounts and financial statements.


Compile a list of all your important paperwork and organize everything by category: Income, assets, liabilities, and fixed expenses. This simple scrutiny of your finances can be a real eye-opener.


If your current situation is bleak, don’t spend time wallowing in what could’ve been. The important thing is that you’re here, right now, trying to fix it.


Tip #2 - Create and Stick to A Budget


Once you have taken stock of your overall financial picture, you may want to go one step further and draft a monthly budget that works for you.


Use your bank statements to determine how much is coming in and going out.

If the numbers are tight, you may want to create a plan to cut your spending – lattes, bottled water, cable bills, unused memberships/subscriptions, etc.

Also, plan ahead for large bills and expenses.


If you’re already using a budget, an annual tune-up can help you ensure it’s still current.


Tip #3 - Tackle Debt


Debt is now a normalized part of the American lifestyle. According to a 2021 CNBC report, the average American has $90,460 in debt!


Unless you’re among the lucky few that carry no debt, your next priority should be to pay back your creditors.


When eliminating debt, it can be good to prioritize bad debt. Bad debt is toxic to your financial future. It refers to high-interest debt like personal loans, car payments, and credit card debt.


There are different ways to make tackling debt feel manageable, such as the avalanche method or snowball method. If you have multiple outstanding high-APR debts, consider debt consolidation.


The key is to find an approach you feel you can stick with and just get started.


Tip #4 - Automate Your Finances


Paying bills and saving does not have to mean reinventing the wheel every month. Automating these activities will significantly reduce the number of “chores” you have to deal with every month.


Having a portion of your paycheck routinely transferred from your checking account will boost your savings.


Paying your house bills on time every month will help you avoid late fees and help boost your credit score.



Tip #5 - Get on The Retirement Savings Track


Retirement experts recommend that you should have a million dollars or more saved by the time you retire.


Many employers offer sponsored retirement plans to reduce your taxable income while saving for retirement.


To further boost the value of a retirement funding vehicle, some plans offer a company match on employee contributions. Don’t leave money on the table.


Similarly, consider increasing your IRA contributions if you’re not reaching the limit for the year.


Tip #6 - Get on The Retirement Savings Track


When was the last time you updated your investments portfolio?


The portfolio you established years ago may not reflect your current needs, growth goals, and risk tolerance. Large market swings can also throw off the balance you want among your investments.


If you haven’t already done so, a simple rebalancing can put your portfolio back in alignment.


Tip #7 - Protecting Your Family and Assets


As you’re getting your financial house in order, it’s also imperative to protect it.


It’s impossible to predict the future, which is why everyone needs homeowner’s (or renter’s) insurance, health insurance, life insurance, and auto insurance if you own a car.

Despite insurance being a proactive financial tool, millions of Americans are either uninsured or grossly underinsured.


Insurance can be a complicated issue for many people, but it doesn’t have to be. At Elevate Financial Services, we explain financial matters to our clients in plain language.

If you are unsure whether you have the right type of protection for your family or assets, call us today to schedule a free financial assessment.


The Takeaway


Getting your financial house in order is not as time-consuming or complicated as many assume. Also, you don’t have to do it all at once.


A good way to approach it is setting an hour or two one day a week to tidy up your financial home.


Have you ever tried to achieve a financial goal on your own? It can be hard. If you can’t seem to get past the first step, a financial advisor will help you feel motivated and keep you on track.

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