You know that feeling you get after organizing your closet or cleaning your refrigerator? That feeling of knowing where everything is in your closet and maybe even finding few treasures you’ve totally forgot about. What about those old jeans you can’t fit or the takeout you forgot in the fridge that needed to go out ages ago? Organizing your finances will give you the same feeling. It gives you a fresh outlook and perspective on life. There is nothing better than understanding what’s in front of you, being prepared for it, and getting rid of unnecessary bumps along the way. Here are some tips on how to tackle what keeps you up at night and get organized once and for all. 

1. Understanding what’s in front of you from a financial standpoint starts with a clear understanding of your current financial situation. You must start with a personal budget. A personal budget is simply a balance sheet of income and expenses. Knowing what bills and expenses you have coming up and how much income you have to cover those expenses is the first and most important part of financial peace of mind. You may not be exactly where you want to be and that’s okay. With a budget you can now start planning and strategizing your way to financial freedom. Click here for the Income and Expense Worksheet.
2. Preparing your personal budget will also help you plan for known and unknown expenses. We all know we have rent/mortgage, car notes, cell bills etc. But what about the about those quarterly or one-time events like oil changes, birthdays, holidays, tuition, or vacations? These are usually the expenses that get you off track financially. Writing down and planning for these events in advance will take the edge off and keep you on track. Known expenses should be added to your budget so you can save for them little by little. For bigger and more prominent expenses like vacation, tuition, Christmas or emergencies I suggest a separate savings account that is not easily accessible or linked to your debit card. Make online transfers or direct deposits into this account as planned. The smaller expenses like oil changes or gifts for friends should go in a savings account that you can access easily. If you attended my Spending Basics course you know how much you can save and how much need to allocate to your emergency fund.
3. Look at your budget often and revise it as needed. A budget is useless if it’s impossible to follow or inaccurate. It will lead you to become discouraged and give up on your financial goals. I think of a budget a lot like diet or workout plan. If the diet is too strict the first thing you will do is cheat. If the workout is too hard the first thing you will do is skip a workout session. Your budget has to be doable and encouraging or you will not stick with it. So budgeting for reasonable personal expenses in your budget is just as important as planning for a cheat meal or workout recovery days.
4. Going through your bank statements often will help you get rid of unnecessary bumps in the road. Remember that takeout in the back of the fridge or those outdated clothes that you would not be caught dead in? Well it’s very possible you have some expenses taking up valuable space in your finances. Maybe you forgot about a subscription you aren’t using anymore or after reviewing your statements you see you go through the drive-thru a little more often than you thought. Sometimes small adjustments can have huge positive impacts on your budget.
5. Finally, make a payment schedule. Many of us get paid twice a month and those of us that are self-employed may receive income all month long in uneven increments. After you print the Income and Expense Worksheet, print a calendar and write your income and expenses as they occur each month. Does your pay schedule align with your bill/expense schedule? Changing due dates on monthly expenses is usually as easy as a phone call and can save you the headache of trying to make one paycheck cover too many expenses.

Even if you feel like you aren’t where you want to be financially, being organized, knowing what you are up against and having a plan is half the battle.