3 Fast Fixes To Get Your Finances In Shape

July 11, 2018

Feeling less than happy with your finances these days? If you are like me, it’s not enough to know that you feel bad about your financial choices. I also want to know why I made those dumb money decisions in the first place.

Getting out of your own head

Some psychologists suggest that our critical inner voice may be one of the culprits. It’s that internal self-chatter that sometimes tells you it’s okay to spend because you deserve that next shiny object and in the next instant berates you for spending like an idiot. Other researchers point to our internal money scripts; the programming in our heads attributed to past experiences with money.

Whatever the reason, it couldn’t hurt to examine our own stinkin’ thinkin’ now and then and give ourselves a positive pep talk instead.

Fixing your finances (and your head)

With almost 3 out of every 4 Americans walking around feeling anxious about money every month, is that any way to enjoy your life? Let’s put an end to this ugly behavior once and for all. We live in the land of fast food, fast cars, and instant gratification after all. Let’s fix our finances, and let’s do it now! Here’s how to make a fast start:

  1. Put your savings on autopilot. You do use online banking, right? If not, stop reading, contact your bank or credit union, and enroll in online banking. While you’re at it, go ahead and download the app for your bank as well. The service is free, and if it isn’t, go shopping for a new banking institution. You also participate in your employer’s retirement savings plan (401(k), 403(b), etc.) at work, right? Here’s how to become a regular saver:
    • Set up an automatic transfer in your online banking app to happen every payday. Use this feature to automatically transfer a set amount of cash ($20, $50, $100, whatever you can swing) from your checking account to a savings account. Specifically, transfer this cash to a savings account you will use for emergencies. You are now building and maintaining an emergency fund. Set up separate savings accounts for vacations, new cars, etc. Making it automatic is key — don’t wait to see if the money is available at the end of the pay period.
    • If you are not already contributing to your retirement plan at work, enroll in that plan ASAP. Contribute at least as much as your employer will match, and more if you are not setting aside 10% – 12% (or more) each paycheck. If your retirement plan has a contribution rate escalator feature, turn that on, too. 
  1. Stop trying to budget. Budgets are for suckers (Not really, but work with me here; I’m trying to stick with a theme). Few people stick with them anyway (including more than a few experienced financial planners). Instead, consider the “no-tracking budget” approach that my colleague Kelley Long wrote about on our blog page not too long ago.
    • Keep your spending plan simple. You’re already saving on autopilot (see #1 above), and you probably have a good idea about how much your regular fixed expenses are each month for mortgage/rent, utilities, car payment, debt payments, etc.
    • Use automatic bill pay through your online banking service to put those on autopilot, too. That just leaves the variable expenses, such as dining out, entertainment, frivolous spending, and the like. For these spending categories, give yourself a good old fashioned cash allowance. When the cash is gone, the fun stops until the next payday.
  1. Pay off debt as fast as possible. Use the debt blaster. Some say pay off the smaller balances first. I say no; we’re in a hurry, remember? The first order of business is to stop the bleeding, and it’s those high interest rate cards and loans that are bleeding your bank account dry the fastest. Pay those off first. Better still, if you can roll over some of your balances to zero interest rate cards first, do that (stop the bleeding). Keep all payments current by paying minimums via online bill pay (see #1 above). Commit the largest amount you can to the highest rate loan on your books, and blast away at it until it evaporates. As your shampoo bottle says, lather, rinse, repeat all the way down the list until you are debt free.

If we are being brutally honest with ourselves, there are no quick fixes to our financial woes. Discipline, dedication, and hard work are what it takes, as with any worthwhile goal. There are, however, plenty of fixes we can quickly begin doing. Which one will you commit to first?