Personal Finance

5 Steps You Can Take TODAY to Fix Your Finances

Expertise:
3 Articles Written
dark curly haired pretty woman in glasses smiling outdoors

Do you worry about your finances frequently, yet don’t do anything to change the situation you’re in? These small steps will help you get to a place of financial security.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

5 Steps You Can Take TODAY to Become More Financially Secure

1. Write down your top 3 financial priorities.

To start, write down EVERYTHING that comes to mind when you think about your finances. This could include saving for your next vacation, sending your kid to college, getting out of credit card debt, or figuring out how much you need to save to purchase your first rental property. Write down all of it. Certain things may be super specific, while others might be more general.

Once you have everything written down, go back and read through the list. Chances are you probably came up with more than you thought. You may be feeling overwhelmed at this point. Don’t go do something else and say you’ll come back to it. Think about each thing that you wrote down and come up with your top 3—no more and no less. When you are having trouble prioritizing your top 3, ask yourself these questions:

  • On a scale of 1-10, how stressed does this (thing) make me feel?
  • What would make me feel happiest if I got done or started?
  • What is a need versus a want?
  • Why have I avoided this in the past? Does it make me feel overwhelmed? Scared? Do I not know HOW to do this?

OK, you have your top 3. Good. Now focus on these three things and work to make progress. How do you feel? I hope that by just focusing on three things you feel more confident in your ability to make progress.

short-sale

Related: 6 Tips to Improve Your Financial Emergency Plan

2. Talk about your financial priorities with your significant other.

If you’re in a relationship, it’s important to be in sync when it comes to finances. Money is the #1 reason that couples get divorced, so it’s critical that you and your partner are on the same page and work as a team. So, tonight, after a nice dinner and glass of wine, sit down and ask each other the following questions:

  1. Where do you see us in the next 3-5 years?
  2. What do you see as our biggest expense in the next six months? Year? Longer?
  3. What do you envision for retirement? Do you want to retire in the next 5 years? Ten?
  4. Do you like our standard of living now? What would you change?
  5. How do you feel about our financial situation?

Some of these questions may not feel directly tied to personal finance, but they all are. For example, it’s unlikely that most couples in their 20s ask each other about retirement. But it’s actually extremely important. If one of you is fine with retiring to a “simple life” while the other wants to travel the world or live in an exclusive golf community, you need to talk about that and what it will mean to make that happen.

I’m sure many of you have never had these types of discussions with your partner. That is OK. But, starting today, make it a topic of conversation once a week. These questions don’t have a right or wrong answer. There may not be an answer or resolution today or tomorrow. But hopefully you will start to feel more comfortable talking about money with your significant other and like you are a team working towards the same goals.

3. Don’t buy any “wants” today.

Before you make any purchase, ask yourself whether that is truly a need or if it’s a want. No, you do not need a cup of Starbucks coffee. Once you start thinking in this mindset, you’ll start spending less money. One nice cup of coffee each week won’t break the bank. But one $4.00 coffee every day ends up being over $80.00/month and almost $1,000 every year! And that’s just your cup of coffee.

millennials-real-estate

Related: 4 Tips for Recent College Grads Seeking Financial Freedom

4. Read up on life insurance.

A lot of people do not have enough (or any) life insurance. If you’re married with kids, it is very important that you have the right amount of coverage. Chances are, it’s less expensive than you think. Take 15 minutes to read the this article to see if you need life insurance, and if you do, how much.

5. Smile.

Finances isn’t a fun subject for most people. It’s hard. It will likely require sacrifices. If you’ve done #1-4, smile. Feel proud that you’ve done more to secure your future than you did yesterday or the day before.

Anything you’d add to this list? Which of these do you plan on following?

Leave your comments below.

jQuery( document ).ready(function() { ga('send', 'event', 'New Member Funnels', 'Appeared', 'UBG Footer Blog Ad'); });

Julie is a software engineer, real estate investor, and book worm. She accidentally fell into real estate five years ago and currently owns three rental properties in the Des Moines, Iowa metro. She couldn't be happier working at BiggerPockets and looks forward to helping change more lives! In her free time, Julie enjoys live music, watching/playing sports, and spending time with her boyfriend and dog.

    Roy Schauer
    Replied over 5 years ago
    Good post! I am thankful to have a wife who supports my crazy addiction to Real Estate even when everyone else said it couldn’t be done. I’m also thankful for the informational and moral support of the Bigger Pockets community. Thank you all for understanding and sharing in the craziness of what we do!
    Kevin Perk
    Replied over 5 years ago
    Roy, Having your spouse along for the ride makes things much easier. I am thankful for that as well. Plus, it is nice to be able to vent our frustrations here and get a sympathetic ear. Thanks for reading and the kind words, Kevin
    Ryan Ebanks
    Replied over 5 years ago
    Very often, the focus of RE investment is cash flow, appreciation, resale analysis etc etc… Seldom do we put a value on the numerous other benefits that make RE investing rewarding such as amazing relationships, new skills… This is a good reminder and a refreshing summary.
    Kevin Perk
    Replied over 5 years ago
    Ryan, Thanks for the kind words. I appreciate you reading and commenting, Kevin
    Mehran
    Replied over 5 years ago
    Great post Kevin! As a fairly new investor working toward leaving my “job”, I’m excited to read your reflection after years of making it happen. Good stuff, thanks so much for sharing.
    Kevin Perk
    Replied over 5 years ago
    Mehran, Thank you for the kind words. I enjoy giving back to new investors like you. Kevin
    susanblake
    Replied over 5 years ago
    so very true! thanks for summing it all up!
    Kevin Perk
    Replied over 5 years ago
    Susanblake, Thanks you for reading and for the kind words. I do appreciate it. Kevin
    Jerry W. Investor from Thermopolis, Wyoming
    Replied about 2 years ago
    Julie, A very nice article. Thanks for your advice and taking the time to share it.
    Julie Kent Investor from Lincoln, NE
    Replied about 2 years ago
    Thanks, Jerry!
    Dale K Poyser
    Replied 2 months ago
    Solid advice, especially the parts about writing things down and talking to your significant other. One of my mentors always said this at the end of a session. “An unwritten plan is impossible to follow” Another thing I’ve always heard is “you are the sum of the five people you must associate with”
    Dale K Poyser
    Replied 2 months ago
    Solid advice, especially the parts about writing things down and talking to your significant other. One of my mentors always said this at the end of a session. “An unwritten plan is impossible to follow” Another thing I’ve always heard is “you are the sum of the five people you must associate with”