The first is letting go of any blame you may feel for the past money mistakes you have made as well as any blame you may have placed on your spouse or partner.
The second step is to take a comprehensive look at your finances. This means look at all of your financial statements for your bank accounts, mortgage and car loans, retirement accounts and short-term loans. If you are struggling to keep your bank account balanced and aren’t sure why you sometimes fall short, causing you to go overdraft, open a new account and close the old one once all transactions have posted.
The next and third step is to make a strategy to pay off your credit card debt. Not only will this relieve financial stress, it will help you on your way to getting a fresh financial start. Concentrate on paying off the cards with the highest rates first. Be sure to make at least the minimum payments on all of your cards and be on time! If you are able to make more than the minimum, do so as this will help get them paid off even faster. If possible, transfer your higher balances to a zero-percent interest card, even if it’s for an introductory time period. This can save you a lot in interest.
Step four is to take control of how much you spend and save each month. Consider all the ways you can save including cutting down on cable bills, cellular plans, and energy usage. It all adds up in the long run and can put you that much closer to paying off your bills and putting more into savings.
The next step, step five, it to start investing. This is different than saving for short-term goals like purchasing a home or taking a vacation; typically, anything that will happen within five-seven years from now. Any longer financial goals, like retirement, need to be done by investing in a 401K, Roth IRA, and/or stocks.
Step six is to get a handle on your credit score. You can go to MyFico and get your credit report along with your score. It’s important to understand how your credit score affects your financial decisions and how much purchasing power you have when it comes to buying with credit. If your score is low and you are working to rebuild it, be sure to make your debt payments on time and for at least the minimum amount.
Finally, diversify your assets. With step eight, you will put your money into stock, bonds, and mutual funds. You want to be more aggressive when it comes to investing as you want to get the best return on your money. This is where you build a nest egg for the future. Do your research and consult with a financial planner if possible to make sure your investing choices match your future financial goals as well as your income level.