You know the feeling all too well.  You’ve done mental gymnastics a hundred times.  You’ve busted out the phone calculator to triple check the math.  You’ve checked your bank account for the third time today to make sure the money is still there and no surprise charges have derailed your intricate plans to make it to payday with a few dollars left in your account.  

You are stressed about money.  And you can’t believe you’ve found yourself in this situation yet again.  After months of reminding yourself that you make good money and reassuring yourself that next month you’ll do better, you start to call yourself on your own bullshit.  “Yea right” you think.  “It’s always something.”  

I know I don’t have to tell you this, but stressing about money is no fun.  It sucks to work to earn money just for it to disappear as fast as it appeared.  Feeling out of control with your finances and having no idea where all your money is going or how it went so fast can be so discouraging.  It can be pretty disheartening to feel like you’ve been working so hard and have nothing to show for it.  

All is not lost though.  You absolutely can turn your financial situation around.  

There are only two things I would do TODAY if I were stressin’ and obsessin’ about my money situation.  And it is best to just do it today – right now – before you start overthinking it or talking yourself out of it.  Ready?  Here goes:

#1 – Take a Deep Breath

Or five.  Seriously.  It is not at all useful to engage with your finances when you are in a state of stress and anxiousness over it.  You definitely don’t want to be making any financial decisions when you are stressed or acting in haste. If you are freaking out because you feel like things are so out of control – you are only going to make things worse.  If you try to look at your money from a place of stress and anxiousness, you will only confirm what you are already feeling.  You don’t have to be in a good headspace, but I don’t want you in a bad one either.  So calm down.  Move on to #2 when you are in a state of a touch more curiosity than frustration.  Just a touch! 

#2 Gather as much financial information as you can real fast like

Ok, here’s the deal.  You are going to feel 100x better just by getting your financial information out of your head and all in one place.  And I want you to do it real fast so that you 1) don’t get too bogged down with the details (you can come back to those later) and 2) don’t lose momentum.  You can always add to your financial information later as you think of more things.  Aim for B- work.  You can go for extra credit later.

Ready?

I want you to get out a piece of paper and a pen.  And I want you to make a list.  Write down your:

Income

Write down your monthly take home pay (the amount of money that comes into your bank account on a monthly basis from your job(s).  For example, if you get paid $3,000 twice a month, your monthly take home pay would be $3,000 x 2 = $6,000.  (don’t worry, we’ll do a more detailed analysis of our income later).  

Expenses

Write down your expenses – use your best guess.  Write down how much you are spending on things like housing, vehicles, student loans, daycare, food and household supplies, utilities, kids, health and wellness, debt payments and any other expenses you have. Be sure to think about less frequent expenses like vehicle registration renewals, annual school fees, semi-annual insurance payments and things like that. To get those in a monthly amount, divide the amount by the number of months it covers. So for example, if you pay car insurance every 6 months, divide the amount by 6.

This does not have to be exact and know that you are going to be off some.  Its okay.  Aim for capturing 80% of your expenses (remember, B- work!).  So like in my example above, if I know I currently don’t have any money left over at the end of the month and I make $6k a month, then I need to at least account for 80% of that or $4800 so round to $5k.

If you are a real go getter and want to, an excellent place to find this information is on bank and credit card statements.  Reviewing those statements can at least remind you of expenses you may not be thinking of.   Some banks will even allow you to export your statements to Excel for easier review.

On the other hand, if you blacked out when I just did math up above, Just list your expenses.  Do your best.  Total all those up.  

Things You Own

Write down everything you own. So what does that mean?  Things you own like your house (if you bought it), your car, a boat, a camper.  Doesn’t matter if you owe money on it, we’ll get to that in a second.  Write it down.  Also write down any bank accounts you have and how much money you have in them.  Same with investments like a 401k through your employer.  If you aren’t sure what the balances are you can either estimate it or you can go log into your accounts and get the balances.

Things You Owe

Write down how much you owe on the things that you own.  What is your mortgage balance?  What do you owe on your vehicle?  How much do you owe on credit cards or student loans?  Do you owe family members money?  Even if you don’t know what you owe, write it down so you can come back to it later.  

Ok then ya gotta do math on 2 things.

Subtract your expenses from your income to see how much you have left over on a monthly basis and write that number down.  If it is a positive number, you have a monthly cash surplus. If it is negative, you are spending more money than you make.

Then subtract what you owe from what you own and write that number down too.  This number is your net financial worth. .  

Ok, why did we do this?  There are lots of reasons, but you my friend are trying to reduce your financial stress.  So think of this exercise as getting everything financial out of your head and onto paper.  Now you don’t have to remember it all and keep it all in your head.  And now you’ve got some distance from it.  Now you can have a clear look at things and start to work with your financial situation, which I will show you how to do.  There is one thing I don’t want you to do, which leads me to a third step (I know, I told you there were only 2!)  Consider this one a bonus tip 🙂

#3 – don’t freak out

Don’t freak out.  Breathe.  And pat yourself on the back.  You have done the really hard part.  You may have been ignoring your financial situation for months or years and you actually looked at it head on.  This is now just data – just information.  You get to decide what you think about it.  I’m not going to sit here and tell you to think positive and it’s not as bad as you think because I have no idea what your situation is.  But I do know you can’t change the past.  All you can do is move forward.  So I will say onward and upward, OK?    And if you can’t get to onward and upward, the best thing you can do is get to a place of neutrality about it.  Like an “it is what it is” attitude.  

And whatever you do, don’t let shame and guilt enter the chat, okay?  People make financial decisions that make sense to them at the time, so there really is a valid path that got you to where you are today.  

And this is my invitation to you to turn the page – to start down a new financial path.  One with less stress, more clarity and confidence.  

If you want to DIY your financial transformation, keep reading blog posts and checking out resources as I publish them. I’ll give you everything you need to stress less with money.  If you have been trying to figure it out on your own and have reached a place where you believe 1:1 financial help could benefit your situation, schedule a Free Stress Less Start Call here.