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How To Get Your Financial Life In Order

financial life

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When I hear, “I need to get my financial life in order,” I know you view your finances as something you have ignored for a while and are not excited to start.

 

Instead of viewing it as a chore, it is time to start seeing money as a tool to free yourself financially and emotionally.

 

I help my clients dream without limits. If money were not a factor, where would you be in two, five, and ten years? Then, we work backward to start building their dream lives.

 

You dread starting because you keep thinking about your debt and circumstances and cannot imagine what your life can be like in just two years. Do not worry because you are in the right place to start changing the trajectory of your life.

 

Here are six steps to do to get your financial life in order:

 

1. Asses your current financial situation

 

Assessing your current financial situation is the first step to getting your financial life in order.

 

This includes:

 

  • Review all sources of income: You should clearly understand how much money you bring in each month from each source. This way, you know how to give it direction; it is okay if it changes monthly.
  • Listing all expenses: Track your spending for at least a month to know where your money is going. Include recurring payments and irregular charges. Refrain from being hopeful in this area; it is best to be realistic and ensure your numbers are accurate.

 

2. Create a realistic budget

 

Creating a budget is an important step to manage your finances effectively. You cannot skip this part! No matter how much you make, this will always be your roadmap to your goals.

 

Here is how you can create a budget that works:

 

  • Set financial goals: short-term goals like paying off debt and long-term goals like planning for retirement. List them all, and do not hold back. This is where the planning begins to reach your goals.
  • Categorize your expenses: Divide your expenses into fixed (rent, utilities) and variable spending (dining out, entertainment) categories. Note that your variable spending is something you can aim to spend more or less depending on your needs.
  • Allocate funds accordingly: This will be based on your goals above. You will always be aware of where your money is going.

 

3. Build an emergency fund

 

An emergency fund acts as a financial net.

 

Here is why it is important:

 

  • Unexpected expenses: Cover unforeseen expenses like medical emergencies or car repairs without financially setting you back.
  • Job security: Provides you with opportunities in case you lose your job. These opportunities can include taking your time looking for the next job and ensuring it is better than the last one or traveling before starting your next job.
  • Peace of mind: Reduces financial stress and anxiety. You can stop living in survival mode and experience less stress.

 

4. Manage and reduce debt

 

Debt can quickly spiral out of control if not managed properly.

 

To get your financial life in order, consider the following steps:

 

  • List all debts: Credit cards, loans, family members, and other liabilities.
  • Prioritize payments: Focus on high-interest debts first, as mathematically, you will save money in the long run. However, if you need momentum to stay consistent in the debt payoff journey, prioritize paying off the lowest balance debt. Even though you will not save money in the long run, you will build the self-trust to stay consistent and finally pay off the most debt you ever have!
  • Consider consolidation: If you have multiple debts, consider consolidating them, as it can help simplify payments and reduce interest rates. Refrain from accruing extra debt.

 

5. Start saving

 

Saving is crucial to strengthen your financial health.

 

Here is how to get started:

 

  • Open a savings account: Look for high-yield savings accounts to grow your money faster and risk-free. Only spend up to five minutes choosing the account; ensure it is FDIC-insured. A few options are Ally, Sofi, Capital One, Marcus, and many more.
  • Automate savings: Set up automatic transfers to ensure you consistently save monthly. You can do this directly with your employer so your money is automated before it touches your checking account.

 

6. Plan for retirement

 

Planning for retirement should start as soon as possible. You want your money to compound over time.

 

Here are some tips:

 

  • Contribute to retirement accounts: Maximize contributions to 401K accounts or IRA. You can start by matching your employer’s match and then maxing out your Roth IRA. Then, you can go back to your 401K and continue contributing.
  • Take advantage of employer’s matches: If your employer offers matching contributions, take full advantage. This is part of your compensation package. If unsure what your employer offers, schedule a call with HR to walk you through the process. Unfortunately, HR does not ensure you understand what is available to you. Advocating for yourself and asking all the questions is very important here. Personal finance is difficult to understand, and no question will ever be dumb.

 

Maintaining your financial life is an important step towards financial freedom and security. You can take control of your finances by assessing your current situation, creating a budget, saving, managing debt, and planning for retirement!

 

Taking action on all these steps can feel daunting, but know that you can start one step at a time. Remember, the key is to stay committed and have fun along the way because it does not happen overnight. All your small steps compound and you will have peace of mind!

 

When we work together:

 

  • I help you be excited about your financial plans and rewrite your money story
  • I help you go from “I need to get my financial life in order” to “I want to build my dream life.”
  • I help you release the stress of your money and experience peace. You will be happier because you are not constantly thinking about money.

 

If this resonates with you, I invite you to work with me! I want to help you feel confident managing your money and build a life you have never seen your family experience. I assure you that you can achieve any goal in mind! Book a sales call.

 

I cannot wait to be part of your journey!

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ABOUT AUTHOR
Orlenda Cortez

Welcome to my corner on the internet! I’m obsessed with using money as a tool because it led me to pay off $30K in consumer debt in a year and a half, helped me save $20K in nine months to have my dream wedding in Costa Rica and is helping me build the life I never saw my family experience. Now I want to help others do the same!

Orlenda Cortez
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