Get Your Financial Ducks In a Row

Three Steps to Get Your Financial Ducks in a Row

“Start where you are. Use what you have. Do what you can.”

-Arthur Ashe

The other day, I stood at the door to my linen closet, frustrated.  I was putting away a set of sheets, but there was no space.  I shoved and squeezed them in around the towels and blankets already in the closet. Quickly I shut the door so nothing would escape. I knew…I needed to organize the linen closet.  But I was dreading it.  The longer I put it off, the bigger it’s grown in my head.  And it has reminded me, often the hardest part is getting started.  I think it’s often the same when it comes to money.  You want to get organized, get on top of it, and master it.  But, when you aren’t sure where to start, it seems daunting.  So, what do you do when you are ready to get organized and want to get your financial ducks in a row?

First, I think it’s important to acknowledge the desire to start.  Give yourself a round of applause for getting to this point! This is the spark that will grow into developing your own money management system.  And when a task feels big and our minds can’t wrap around it, this spark is SO important.  To nurture that spark, I find it’s important to do a few things right out of the gate.  These three steps are things you can do today to kick your money stress to the curb and get your financial ducks in a row.

Step One to Get Your Financial Ducks in a Row – Determine Your Why.

The first thing you need to do when you are setting out to change old habits and establish new ones is get crystal clear on your WHY.  Without your why, as motivation fades (because let’s face it, no one is motivated all the time) you lose momentum.  Meaning, it will be harder to get your financial ducks in a row.  Your why is the reason that you are getting on top of your finances.  It’s what is driving you.  As you start out organizing your finances and getting on top of your money, take a few minutes to figure out why this matters to you.  

Are you trying to eliminate your money stress to be more present at home? Do you want a clear money organization system so you and your partner can finally be on the same page? Do you want to know where your money comes from and goes so you can max out your savings? We all have reasons for doing the things we do. These reasons support our core values and help keep us on track.  Take time to identify why you are getting on top of your money.  Write it down, in detail.  This will allow you to revisit it on the days motivation wanes.  It will gives you clear direction to move as you get started.

Step Two to Get Your Financial Ducks in a Row – Make a List of Accounts.

Once you are clear on your why, it’s hard to know what to do next.  I find the next most useful step is to make a list of your accounts.  This helps get your financial information in one place.  When you make your initial list, you don’t have to add account numbers or log in information.  That can make this step feel too overwhelming.  Instead, just make a list with three key pieces of information:

  1. The bank or financial institution that holds the account
  2. The type of account (checking, saving, money market, investment etc.)
  3. The purpose of the account (regular expenses, emergency fund, retirement etc.)

Listing your accounts will help you start your organization process.  It will help you see where you hold money. This is important because not knowing where all your money is leads to more stress.  It’s also a good way to ease into creating a master list of accounts and how to access them.  Having a master list of your accounts along with access information gives you easy access without having to worry about tracking down account information.  It also makes it easier for a loved one to manage financial matters if you are unable to for any reason. Organizing your finances is a big task. Starting with a list of accounts is a good way to start.  And it’s a great step to take to get your financial ducks in a row.

Step Three to Get Your Financial Ducks in a Row – Track Your Monthly Money Moves.

Once you have a list of your accounts, the next step is to create a money map.  This money map will track money as it moves in and out of your account each month.  Start by mapping out all the sources of income that you have.  Include earned income, investment income, support services if received, and income from anyone else that you rely on for your monthly budget.  Make a list of where the income comes from, when it is received, and who receives it.  You can also make a note to show if income is direct deposited.  Then, track all of your essential expenses. Essential expenses are things that you much pay each month to survive. Include your mortgage/rent, groceries, debt repayments, childcare expenses, medical expenses, insurance payments, and anything else you have to pay each month.

Don’t forget to include any bills you pay in intervals other than monthly.  This includes car insurance, property taxes, estimated taxes, or anything else that you pay throughout the year. For more on mapping out your money moves, check out my blog post Creating a Bill Pay Calendar.

Mapping out your money moves is good because it helps you see the bigger pictures.  It defines what essential spending needs to take place from your budget each month.  It also helps someone else who may not be familiar with your bills understand what is due and when if for some reason you can’t pay your bills yourself. If planning ahead for these big bills is something you struggle with, check out my blog post on How to Avoid Big Bill Sneak Up.

What to do When a Duck Wanders Off

Taking these three steps will help you as you start to get your financial ducks in a row.  But what do you do when a duck wanders off? Or, in other words when you are disorganized again?  First, it’s important to know that we all slip up when creating new habits and new organization methods.  When we get stressed or life comes at us a little too fast, we revert to what is comfortable and easy.  So, if you do find yourself back in old habits of disorganization, know that it’s normal.  It doesn’t mean you’ve done something wrong.  It doesn’t mean you’ve failed.  And it doesn’t mean you are doomed to be financially disorganized forever!

The first thing to do is give yourself some grace.  Know that the intentions were there, but life got in the way.  Then, start again.  Revisit your why. This will help bring back the spark you felt when you started.  Then review the accounts list and money map you’ve made.  Has anything changed? Update the list as needed.  Taking these three steps again will help you refocus.  Then, ask yourself “what’s the next small step I can take to get my financial ducks in a row?”  Taking the next small step gets you back on track and moving forward.

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