Do you feel like your money slips through your fingers faster than you can keep track of it? If you want to know how to get your finances in order but aren’t sure where to begin, you’re not alone.
Maybe you made some financial missteps in the past and are still trying to recover. Maybe you never learned about money management, so budgeting, retirement savings, and taxes are practically foreign concepts. Or maybe your salary just isn’t enough to cover the essentials each month, and you feel like you can’t get ahead.
The good news is you don’t have to overhaul your finances overnight. Small, intentional steps can help you regain control and start moving toward financial stability.
How to get your finances in order
Below are practical steps you can take to get your finances in order.
Start Tracking Where Your Money Goes
Before you can change your financial habits, you need to know where your money is going. The problem is, for most people, budget is a four letter word.
According to the CFP Board, two in five Americans have never had a budget. And even among people that say they have a budget, 43% define budgeting as using receipts and bank statements to keep track of spending after the fact instead of creating a plan for how they’ll save and spend their money in advance.
Even if you don’t create a strict budget, tracking your spending can be helpful. That’s why when I work with clients who want to get a better idea of where their money goes, I recommend Quicken Simplifi.
Quicken Simplifi connects directly to your bank accounts, credit cards, and other financial accounts. It automatically tracks your income and expenses, organizes transactions into categories, and allows you to set up a spending plan. If you’re not ready to commit to a full plan, you can start by creating a watch list for categories where you tend to overspend—such as shopping, entertainment, streaming services, or dining out.
Awareness is powerful. Once you see the numbers, you can make better choices about where to cut back or redirect your money.
Set Small, Realistic Goals
Once you have a clear picture of your spending, start small. Instead of trying to cut your expenses in half overnight, choose one or two categories to focus on. For example, you might set a goal to cook at home three nights a week instead of ordering takeout.
These incremental changes free up money and give you a sense of accomplishment, which makes it easier to keep going.
Build an Emergency Fund
Life has a way of throwing curveballs like car repairs, medical bills, or even a sudden job loss. Without a financial cushion, these surprises can quickly derail your progress and push you into debt. That’s where an emergency fund comes in.
An emergency fund is simply money set aside for unexpected expenses. Think of it as your financial safety net. Having one gives you peace of mind, knowing you can handle life’s surprises without turning to credit cards or loans.
So how much do you need? A good starting goal is $1,000 set aside as quickly as possible. Once you have that, aim to build your fund up to cover three to six months of living expenses. This might sound overwhelming, but remember, you don’t need to get there overnight.
Open a separate savings account, so you’re not tempted to spend it. Set up automatic transfers from your checking account each pay period, even if it’s just $25 or $50. Use any extra cash, like a tax refund or bonus, to give your emergency fund a boost.
The key is consistency. Every dollar saved brings you closer to financial stability and reduces the stress that comes with life’s inevitable surprises.
Add Friction to Your Spending
One reason overspending is so common today is that technology has made it almost effortless to buy things. With one-click checkout, saved payment details, and shopping apps at your fingertips, spending money has never been easier or faster. But what’s easy for retailers isn’t always good for your wallet.
That’s why it’s helpful to add a little friction to your spending. Friction means making the process of buying something slightly less convenient, so you have time to pause and think before you hit “purchase.”
For example, if you find yourself overspending on Amazon, delete the app from your phone and only order through the website. Don’t save your payment method online. Entering your credit card number each time slows you down and gives you a moment to reconsider whether the purchase is really necessary.
These small barriers can make a big difference. They help you become more intentional with your money and cut down on impulse purchases that don’t align with your financial goals.
Rethink How You Use Credit Cards
Credit cards aren’t inherently bad. They can help build your credit history and even earn rewards. But there’s a catch: if you carry a balance, the interest you pay usually wipes out any benefits.
If at all possible, pay off your balance in full each month to avoid interest charges. If you’re currently carrying a balance, focus on paying it off before chasing rewards or cash-back programs.
Trying to “earn” credit card perks while you’re in debt is like pouring water into a leaky bucket. Fix the leak first.
Create a Debt Repayment Plan
Debt can feel overwhelming, but there are strategies to help you dig out. Here are a couple to consider:
- The debt snowball method. Pay off your smallest balance first while making minimum payments on everything else. Once that debt is gone, roll the payment into the next smallest balance, and so on. This method builds momentum and confidence.
- The debt avalanche method. Focus on the debt with the highest interest rate first. Over time, this saves you more money in interest, though it may take longer to see your first “win.”
Whichever method you choose, the key is consistency. Keep going until your consumer debts, including credit cards, car loans, or personal loans, are paid off. Prioritize these before putting extra money toward paying down your mortgage or student loans, as those tend to have lower interest rates.
Watch Out for Lifestyle Creep
As your monthly income increases and you pay off debt, it’s tempting to increase your spending. This is known as lifestyle creep, and it can erase your progress.
Instead of upgrading your lifestyle, redirect that money into savings. If your employer offers a workplace retirement plan, start by contributing enough to receive the full employer match—it’s essentially free money. From there, increase your contributions gradually as your budget allows.
Keep Building Toward the Future
Once you’ve laid the foundation by tracking your spending, reducing debt, and saving consistently, keep the momentum going. Set long-term goals like buying a home, saving for education, maxing out your 401(k) or individual retirement account (IRA) contributions, or investing.
Financial success isn’t about perfection—it’s about steady progress. Getting control of your finances in small, manageable steps makes it doable. And the payoff is worth it: less stress, more security, and the freedom to use your money in ways that align with your values and goals.
If you need help getting started, contact Firefly Financial Organizing. I’d love to help you work toward your long term financial goals.
