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3 Baby Steps To Get Started Optimizing Your Finances

Once you’ve decided that you’re ready to start optimizing your finances, it can be hard to know where to start. There’s soooo much financial advice out there! From so many people who may or may not be giving you advice that benefits them or their employers! If you’re looking to get your finances in order here are three super doable, not-overwhelming first steps to take. I expand on these (and share three more baby steps) in this podcast episode! 3 Baby Steps To Get Started Optimizing Your Finances 1. Define what DONE looks like when it comes to getting your finances in order

Let’s say you’ve decided that you want to start investing in a Roth IRA. “Done” is not just opening the account. “Done” is having it set up so there are automatic deposits going into the account on the reg AND they are being invested into the market, whether that’s an index fund or other mutual fund or something else.

Or let’s say you’re trying to pay off credit card debt faster. “Done” isn’t just putting your info into a debt calculator to see how much more you need to pay each month in order to pay it off by a certain date. “Done” is figuring out if you can actually afford to pay that much extra. “Done” is then taking steps to make sure that extra payment is going toward the best account and figuring out how to keep yourself from needing to use credit cards going forward. “Done” might also involve refinancing your debt through balance transfers or consolidation loans. Which could first mean doing some credit repair. That’s a lot more work than just popping some numbers into a debt calculator!

As a person with ADHD, I can tell you that defining “Done” is CRITICAL to keeping me going and following through on stuff like this. It’s so easy to get excited about figuring out a new project then get partially into it and abandon it because I ran up against a roadblock. So what does DONE look like for you with your current financial goal? Knowing this can help you break down the steps to get where you want to go.

2. Get past perfectionism by JUST STARTING You might literally have to say to yourself “Not today procrastination masking as perfectionism! We’re going to get this train moving and it might be messy, but I know that once I get moving, I’ll be able to clean things up along the way.” Here’s what perfectionism might look like in action. Let’s say you know you want to start putting some money into a Roth IRA but you’re not sure you can afford to put the $541.66 in each month that would get you to the annual maximum amount of $6,500 for 2023. Your perfectionism tells you that if you can’t do that, then you need to find the perfect amount that’s enough to make a difference, but not so much that you’ll find yourself dipping into your savings to get to the next paycheck or whipping out the credit card to buy groceries.

While it’s great to strive for that “perfect number,” there’s no way to know the perfect amount until you try. So rather than waiting till you have time to sit down and analyze your spending, just to start with what I call The No-Brainer Amount. Your No-Brainer Amount is the amount you’d spend on an Old Navy tank top or a quick snack after the gym - something you know won’t break the bank. You can increase your contributions from there, but getting going is the MOST important thing.

3. Create friction so it’s harder to spend money

If you want to hold yourself to spending limits or break habits you know are detrimental to optimizing your finances, create friction so that it’s harder to spend money. Forget about creating the perfect budget. The perfect budget won’t stop you when you’re scrolling through Instagram and see a dress you like on your favorite fashion influencer’s story! Ways to create friction so it’s harder to spend money:

  • Delete your credit card information from your phone and computer so you have to manually enter it every time

  • Remove Amazon and other shopping apps from your phone

  • Keep a low balance in your checking account (if you’re the sort of person who avoids overdraft fees come hell or high water)

  • Create email filters to send coupons and other offers straight to a file so that you can still access the coupon code when you DO need to shop, but you’re not tempted pretty much every day with offers in your inbox.

Ready for more? Listen to three more steps on this podcast episode!


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