Organize Your Life Day 4: Finances

Daily living can be scary and uncomfortable when your finances are in shambles.

Much of the fear lies in the unknown. Am I going to be able to afford my child’s college tuition? What if we run out of money before the next paycheck? How will we survive if we lose our job? Can we afford that trip? How much should we be saving? Is this a wise investment?

While we’re not going to be able to make you millions of dollars today vanishing all worries (so sorry, wish we could!), we are going to simplify and organize your financial world, thus taming the overwhelm.

Welcome to Organize Your Life Day 4: Finances.

This is part of a mini-series on overcoming parenting (and life!) overwhelm and stress by organizing your life. Click here to see the introduction and links to other days.

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Join the Challenge and Get Your Life Organized!

It shouldn’t be so difficult. You work, earn money, buy what you need, and live happily ever after. Right? Unfortunately, throw into the mix ingrained beliefs, other people, economic changes, unmet expectations, lack of a personal financial system, or one hundred other factors, and the world of finances can get pretty mucky very fast. Much of the stress of parenting and life in general comes from money worries. In fact, a recent poll of thousands of Americans found that money and work were two of the top five stressors. In order to organize life and overcome parenting overwhelm, we need to address personal finance.

The purpose of today is to simplify your financial world. We will do this through four steps.

1. Determining what value money holds for you.
2. Figuring out where you currently stand financially in attitudes and actual numbers.
3. Creating concrete tasks for reaching short and long-term financial goals.
4. Setting-up a system to monitor your finances.

1. The Real Value of Money

Pull out your Workbook or journal and review Days 1-3. Turn to your fresh page for Day 4: Finances.

There is nothing inherently valuable about a large number in your bank account. Dollar bills are pieces of fancy paper. The value is in what that money represents, both what you were willing to give for it and what you will do with it.

In your journal or Workbook, answer the question, “What are you willing to give for money?”

Be creative and honest in your answers. Ideas range from time and sleep to blood platelets and old belongings.

Next, answer, “What are you NOT willing to give for money?”

We all have limits and boundaries. What are yours?

Now the exciting stuff. “What will you do with your money?”

Consider the possibilities if your funds exceeded what they are today. Fill in a chart with two columns: Definitely and Would Be Fun.

Are your answers in line with your choices from Days 1-3?

These big picture questions will help you realize what value money holds for you. The first two questions guide our “How” of finances and the last determines our “Why.” These are both important to keep in mind as we go forward.

2. Your Current Financial Standing

Attitudes

At the heart of our financial behaviors, and thus our financial standing, are our beliefs about money. These beliefs and attitudes are acquired over a lifetime of experience and interaction with parents, employers, and others. Sometimes the attitudes run so deep that although they may directly affect our day-to-day decisions, we don’t even recognize them. Some of the attitudes are helpful and others harmful to our financial behaviors and personal relationships.

Here are a few examples of helpful beliefs or attitudes about money.

• There is an abundance of money in the world, more than enough to go around.
• I have skills, abilities, and talents that can help our family finances, either by earning money or spending it wisely.
• I believe delayed gratification (being able to wait or work for something) is an important skill.
• As a family, we are in control of our financial situation.
• Money is important, but it does not determine my individual worth or happiness.

In your workbook or journal, answer the question, “What are at least three attitudes, beliefs, or behaviors you have that are helpful to your family’s finances.” Examine the times you have felt proud, comfortable, or excited about your finances.

Attitudes and beliefs can also greatly hinder your finances.

There are several widespread, unhealthy, beliefs about money. Be honest with yourself as you consider how strongly you agree with these statements.

• My inherent worth is connected to my income.
• I will be happier when I make more money.
• A larger income deserves greater respect from others.
• I feel entitled to more than what I can afford.
• The opportunities for financial growth are limited to a select few individuals.

These beliefs often lead to behaviors that are harmful to our finances. For example, if you believe your inner worth is connected to your income, you may be willing to sacrifice your family relationships to boost that personal worth. If you feel you are entitled to more than you earn, you may spend money you don’t have. Think about your financial regrets or fears and ask yourself what belief or attitude plays into that situation.

Then write the answer to, “What attitudes, beliefs, or behaviors do you have that are harmful to your family’s finances?”

Actual Numbers

To determine your current financial status by numbers, answer the following four questions.

1.) How much money do you have in your bank accounts or as cash right now?

2.) What other investments do you have (401K, rentals, etc.)? What is their financial worth?

3.) How much debt do you have right now?

4.) What is your current monthly income?

3. Looking to the Future of Your Finances

Look at your current financial status and determine where you hope to see yourself in the future. Create about three long-term financial goals. These can encompass retirement age or savings, marital relationship around money, how you want to earn your money, what you want to be able to afford, or anything else that is important to you. Commit these to writing.

Next, look at each of those long-term goals and think about what it will take to get you there. Consider changes in attitude, budgeting, debt elimination, increasing income, or investing. Choose 3-5 short-term tasks that you can begin working on immediately. These should be concrete and specific. They might be as simple as, “Choose a budgeting strategy,” or “Have an honest conversation with my spouse about our savings.” I have included several resources to help you with this at the end of the post.

When these short-term tasks are complete, you will choose new ones so you are continually progressing toward your long-term goals.

4. A Monitoring System

Unfortunately, finances are not like weeds; we can’t just sit back and watch them grow. Our finances need continual monitoring. At the very simplest, our monitoring needs to include money brought into the household, money spent, and how we are progressing with our goals.

Take the time to answer these questions now.

1.) How will you monitor money in?

• This can be as simple as a running list of monthly income. If you only have one revenue source, bank statements make it really easy.

2.) How will you monitor money out?

• You can spend with debit cards and use bank statements, keep a daily list by hand, use an envelope system, or another method.

3.) When will you revisit your short-term tasks?

• Budgeting fits into your Home Management block from yesterday. Add it to your Home Management Living List.

Further Help for Your Finances

Sometimes you know what needs to be done (for example, get out of debt!), but you don’t know how to do it. Following are several resources that may be helpful as you work toward your short and long-term goals.

Budgeting or Getting Out of Debt

• The simplest overall budget takes your income (bring home income after taxes) and splits it by percentage: 70% living expenses, 20% savings, 10% charity. This is a great place to start.
• Rosemarie Groner runs the Busy Budgeter. Wanting to stay home with her kids, Rosemarie quite her job, learned to budget, and replaced her income from home. Her site is full of down-to-earth advice and helpful challenges.
• Jordan Page’s videos will keep you smiling as you learn concrete steps and advice on budgeting. Their family paid off $15,000 debt in a year with an income of $30,000. Her program helps families step-by-step overcome their budgeting challenges.

Saving or Investing

• I recommend reading The Richest Man in Babylon for a strong savings foundation. My husband and I read and discussed this book while we were dating, and it helped us get set on common financial ground from the beginning.
• You can’t talk about finances and not mention Dave Ramsey. I really appreciate his approach and sound advice. His investment calculator is an easy place to start planning your savings and investments. You can also read one of Dave Ramsey’s books about wealth or purchase one of his classes covering overall finances, teaching your kids about money, and learning to invest well.
• Suze Orman is another big name worth mentioning in the world of finances. If you feel like you’re passed the basics, Suze has advice on investing, wills, and estate planning.

Increasing Your Income

• Ibotta is a mobile app that offers cash back on purchases you are likely already making.
• To get your creative juices flowing, here are 11 ideas for boosting your income.

I hope you are feeling more organized about your finances. You know where you stand and where you are heading. Be sure to record any thoughts, take-aways, or future action items from Day 4. What further help do you want with your finances? Let me know in the comments.

Bring a snack for tomorrow in case you get hungry…Organize Your Life Day 5: Meals is on deck!

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