When you hire a money coach at Dr. Budgets it is like hiring a personal trainer for your money. As a money coach, we show you how to organize your finances, track the progress toward your financial goals, and hold you accountable. The following tips on how to organize your finances are built into the experience when you hire a money coach at Dr. Budgets. If you’re struggling with any of them please click here to schedule a complimentary consultation.
Take a Financial Snapshot. To start, I suggest you become very clear about your current financial situation. Do you have debt? If so, complete a debt schedule that includes all of your debts, your interest rates, and your minimum payments. What do you own? Write down every major item that you own and what it’s worth. Examples include your house, car(s), savings, 401(k), investments, etc. Finally, evaluate your current financial picture. What stands out to you? Do you owe more than your own? Knowing where you are today will allow you to evaluate your progress.
Track Your Spending. Awareness of where you currently spend your money is a critical next step. Once you are aware of how you spend your money, then you can come up with ideas on what changes you need to make to achieve your goals. You can do this by tracking every single expense, for a month or two, on a sheet of paper or a note on your phone. You can use the tools that your bank and credit card companies provide online to capture all of your expenses. Or you can use online software, such as Mint.com, that aggregates all of your spending in one place. The key is to capture all of your expenses so that you become very clear about where your money is going right now.
Create a System. Money is constantly flowing in and out of your life, so it is not the type of thing you can organize just once – you have to create a system for staying organized. There isn’t a one-size-fits-all system for everyone because people are different, so consider your personality while you build a system that works for you.
Have a Strong Goal. Last, but definitely not least, have a strong financial goal. I’ve written about this in prior posts (How to Set Strong Financial Goals and Why You Need Strong Financial Goals). Knowing where your money is being spent and having a clear picture of your current financial situation won’t do you much good if you don’t have a strong goal. So think about what you want to accomplish, then set out to make it happen! Success doesn’t happen overnight; it happens by doing a series of daily habits consistently.
These are my tips on what you can do to organize your finances. Ultimately a money coach will hold you accountable to your goals and your spending habits, but a big part of that is helping you to organize your finances to get there.