Do you feel unclear about where your money is going but unsure of how to get a better handle on the situation? If so, you aren’t the only one – it’s a fairly common problem. 

We see countless individuals and couples who don’t really know what their finances look like. They know they need to get better control of their money but feel nothing but dread when they think about digging in on their budget or savings plan.

Money can feel overwhelming, especially at a time when there are so many economic factors to consider. We understand how frustrating it can be to feel out of touch with your finances and unable to motivate yourself to make changes. But it is possible to recover and start managing your money effectively. The key is to stop avoiding it and to take small, realistic steps toward a better financial situation.

Step 1: Face the problem

When you feel overwhelmed by your money, it’s really tempting to make like an ostrich and bury your head in the sand. Unfortunately, this doesn’t solve anything – your financial issues will still be there whenever you decide to pop back up and look at them.

So the first thing you need to do is convince yourself (and your partner) to make a change. The last thing you want to do is wait until some emergency or unexpected circumstance forces you to make instant financial decisions. If you can motivate yourself to stop avoiding the issue, you can start dealing with it on your own terms.

Step 2: Divide the work into bite-size pieces

Once you’ve made the decision to tackle your finances, you’ve completed the hardest step. Now it’s time to actually do the work. 

Going from ignoring your finances to full-on financial planning is a huge change. It might feel like an impossible task, but there is a way to make it more reasonable: focus on small changes. Completing a few key tasks can lead to big results; as a general rule, 80% of the results come with just 20% of the work.

So, figure out how to divide the project into smaller tasks. For example, if you really have no idea what your income, expenses, and debt look like, start there. Take the time to track your income and spending for a few weeks. Don’t worry about making a budget to follow yet; just get an accurate picture of what your finances look like. Once you have this information, you’ll already be so much further along than when you started.

Step 3: Don’t assume the worst

Maybe you’ve put off engaging with your finances for so long out of fear. You may be thinking you’re in a huge hole of debt or that your net worth has been destroyed by inflation, recession, and wage stagnation, which are things you can’t even control!

It’s tempting to hide and just refuse to deal with it. Unfortunately, hiding doesn’t really do anything to help you – it just prolongs those feelings of dread and anxiety. 

It’s very easy to believe that you’re in the worst financial place possible. But just because you feel like that doesn’t mean it’s accurate. Challenge your assumptions about your finances and be brave enough to find out the truth.

Step 4: Find ways to boost your confidence

If the reality of your finances is much different than you imagined, you may start to feel discouraged or afraid. That’s normal.

This step is all about increasing your confidence. No matter what your financial situation is, remind yourself that it isn’t hopeless. You can achieve your goals and get to a place of financial stability. 

One of the best things to do is find some encouragement and inspiration from others who have gone through similar circumstances. Check out personal finance blogs, books, or podcasts

You might even decide to reach out and participate in some online communities. We all have different strengths, so one of the best ways to improve your financial management skills is to learn from others who are good at it.

Step 5: Focus on the results

It may feel like all the steps so far have been a little bit of tough love, and that’s true to a certain extent. At some point, hiding from your finances becomes unsustainable. We really believe that you’ll be better off when you get control of your money, and we want to help you do that.

The most important reason to finally dive into your finances is a positive one – you’ll reap countless benefits. If you feel anxious and overwhelmed by your money, but think about how much better you’ll feel when you’ve got it under control. All you have to do is be willing to take that first step.

Money doesn’t have to be overwhelming

If you feel like your finances are out of control and you don’t know how to fix them, it’s OK. You aren’t alone, and you aren’t doomed to feel this way forever. Taking control of your finances is really all about being willing to face the situation instead of ignoring it. Once you take that first step, you’re well on your way to feeling confident and in control of your money.

There are many ways to manage your money, and the best method is the one you will use consistently. If you don’t like your current budgeting tool or don’t have one yet, check out BudgetingBlocks™. This unique system makes it easy to visualize your money and decide exactly how to allocate it. It’s the perfect way to break the budgeting process into manageable steps.