Like many people, I used to get knots in my stomach just thinking about tackling my finances.
I didn't have massive debt, had a decent income and yet would still hate sitting down to think about savings, investing and budgeting.
Of course, the easiest thing to do would be to ignore it -- just continue to pay my bills and keep spending almost blindly, without any plan. But as my income and dreams for my future grew, I knew I would have no chance of achieving any financial goals and freedom without taking my money seriously.
So I committed to doing three things, which ultimately helped me overcome my fear of managing my money. Maybe they can help you, too.
1. Writing out my budget
The first thing I had to do to get over my fear of finances, was to write out my budget.
One night I grabbed a glass of wine, put on music and set out all my bills on my dining room table so I could write out my monthly expenses in a notebook. I always knew the rough amount of my expenses but had never compiled them together all in one place before.
While it may seem silly and time consuming to write everything out, it has been a huge help. Now I know exactly what is coming in, what is going out and how much I have to spend on fun stuff, like eating out or shopping.
As the old saying goes: knowledge is power. Now that I know exactly what my lifestyle costs each month, I no longer have any anxiety when thinking about my money or guilt when I am splurging on a night out with my friends, since I know that it is within my budget.
Still too intimidated to budget? Check out the GoGirl Guide to Making a Budget.
2. Review my finances on a schedule
Next, I set a specific time to review my bank account balance, pay bills and check in on my spending.
I have always been good about paying my bills on time as they arrived, but I never really sat down to evaluate how the month went financially or make changes to my budget. Now, I sit down once a month to pay bills, consider upcoming additional expenses and add up my extraneous spending.
With my budget and list of expenses in hand, it is a breeze and takes less than 30 minutes. I review my online banking statement, pay bills online through my bank and think about any special occasions I may need to incorporate into my spending for the next month. I always walk away feeling relieved knowing I am on track and how much I have to spend in the upcoming weeks.
I also now check my online bank account at least once or twice a week. This helps me to ensure that all charges are correct and I can spot any trends that I may need to nip in the bud -- like how many Starbucks runs I have had that week and how this will affect my bottom line. It helps to see these charges/trends as they are happening, before my big "weigh in" at the end of the month.
3. Set small goals
Last, I started setting small goals and tackle them one at a time.
Since I was already contributing to my 401K plan, putting money away each month for an emergency fund, and had a college fund accumulating for my son, I started tackling other goals.
I started small. I would add $10 a month to the amount I was saving for retirement. Next, I set up a special account for a big trip I plan to take in four years -- and have figured out how much I need to put away each month to save for it. Now, I am reading about investment accounts. I know I want my money to grow and the only way it will is if I grow, too. But instead of becoming overwhelmed by taking on too much too soon, I have opted to take it one item at a time, so I don't get discouraged or overwhelmed.
Start small and experience a few wins. Then, keep challenging yourself. The only way to achieve your goals is to start and keep on going.