Creating Financial Awareness – The First Step To Getting On Top Of Your Finances

You can’t enjoy an abundant life and live in clarity while you have unpaid debts, creditors calling, and/or are living paycheck-to-paycheck. You can pretend, ignore the facts, and say you enjoy abundance on the daily all you want.  When you’re done lying to yourself, come back and read this again. 

Abundance is simultaneous with excess, peace, and fulfillment. I never once thought I had an abundant life or truly felt abundance back when I was drowning in debt and clawing for air, but I knew what I wanted out of this life and I was determined to make it happen. (My full financial journey story here.) 

When I began my very panicked journey toward debt freedom, I stumbled upon the big names first and devoured everything Dave Ramsey, Clark Howard, David Bach, Ramit Sethi, and Suze Orman had to offer.

But I quickly realized that I needed a more well-rounded approach and that there was something deeper, under the surface to financial success.  The numbers are a reflection of deeper emotions, subconscious thoughts, unrealized behaviors, and mindsets that require much more than someone telling how you should or shouldn’t allocate your budget.

I took obsessive notes, snagged helpful little tid-bits from each guru, made a step by step plan, and put it into action. Throughout my 5 year journey, I figured out what works best for a mom with young kids, made tweaks to fit the needs of a growing family, and taught my kiddos about money along the way (an ongoing process). 

Beginning Your Journey Toward Abundance

Here’s How The First Step Goes:

Part A is realizing the need and having that record scratching, stop the DJ, “Wait, what???? No way! That sucks!” moment. 

Part B s knowing what the real numbers are. The real numbers – all of them. 

Part A

The very first step in getting your financial act together is awareness and realizing the need for improvement. You’ve got to be desperate to quit being desperate and completely, without a doubt, ready to radically change the way you look at and handle money. 

It’s likely that you’ve hit the “bottom” or gone through a rough patch that’s made you realize something has GOT to CHANGE like I did. Whatever your motivation is, you have to have found it and be completely secure in this decision. 

Think about it – changing the entire way you think about money, all your behaviors involving money, and totally altering your trajectory because of the way you manage your finances is not going to be a short trip or an easy road. 

The Decision To Take Action

You have to know, without a shadow of a doubt that you’re ready to commit to years of work through these changes. There’s a reason people call it a financial journey. Whatever your “why” – maybe you have just $50 left after each paycheck or you’re tired of not being able to afford things – you have to be firm in the decision, and highly motivated at that, to actually make this happen. Maybe it’s the uplifting thought of securing a positive financial future for your kiddo. Maybe it’s the horrifying thought of being old and STILL in debt and calling up your kids for money. Or maybe it’s the realization you’d better model good finances so you’re walking the walk while teaching your kids so they don’t make the same mistakes. Maybe all of these things pull at your heartstrings – they sure do mine! No matter your reason, situation, or desperation is, grab hold of it and don’t let it go – you’re going to need to refer back to that “why” over and over again throughout your journey as motivation. I’ll warn you now, there are going to be multiple moments within the upcoming months where you may start to think that this is just too crazy, too hard, or that you’re just plain tired of slogging through your debt and ready to give up. 

There’s a reason people call it a financial journey. Grit and passion for freedom are why you’ll finish.

There will be moments where you’re just so dang tired of sticking to the tight budget you’ve set for groceries that you’re ready to just go blow it all on a steak dinner and “treat-yo-self” because you “deserve it”. The reality is you’ve been treating yo-self for months and probably years, continuously spending cash you don’t have and wracking up debt like it’s going out of style. It’s GOT to stop if you ever want to get to a point that you’ll actually have cash to invest and with which you can be generous.

I personally decided to ditch debt permanently because these ideas hit me: 

“What would it be like if I could actually keep my income each month and spend it on what I want?!?!” 

“How amazing could my kids’ lives be if I had excess cash and could put it toward amazing causes and could show them that one person really can change the world?”

“What would our lives look like if we didn’t have all these crazy bills each month?”

“How fulfilled will I feel in the future when I’m able to stack my kids’ college funds, have a comfortable retirement, and spend my time doing what I want without a worry about my finances?”

“What could my children’s lives look like if I was able to teach them about money behavior while they’re young, and coach them so they avoid all of the financial mistakes I made?”

The Exponential Impact Of Your Financial Journey

The possibilities are endless! The way your life and your family’s lives can change and the level at which you can impact others – whether you want to dig wells in Africa, fully fund an orphanage, or change ANYTHING about the world – is nearly unimaginable, absolutely exciting, and completely impossible while living a life of bills, payments, and financial pressure. 

You’ve got to get to a point where the big dreams you have are possible. And to do that, you’ve got to get a grip on your financial picture and flip-the-script on how you look at managing your finances. 

You’re here because you’ve drawn your line in the sand and you’re tired of doing the same thing over and over each month. You’re ready to achieve the abundant life you dream of.

So, put your big-girl pants on and lets do this! Sinch your hoodie and lace your shoes, be ready to slog through the muck and fight off theoretical swarms of bees. 

Ready? Here’s where the real work begins. 

Part B

You’ve got to get real with the numbers. 

Not just estimated amounts or where you ‘think’ your balances should be. Not guesses at what the payments are. Nope. Not acceptable. 

If you have no idea how many credit cards or student loans you have, what your balances are, or what your credit looks like, you’re totally lost. 

You can’t improve without knowing where you’re starting from. As scary as it might be, you must face these fears and actually figure out the real numbers.

If you’re thinking, even for just one second, that you can skip this step, you need a reality check. Start by asking yourself some questions and being brutally honest with yourself about the answers. 

• Do you actually know your salary? 
• Do you know what your bring-home value (after taxes and deductions from you paycheck) is? 
• Do you know your credit score? 
• What are your actual balances on student loans, credit cards, personal loans, your mortgage, your car, etc? 
• Do you know what bank your checking and savings are in and the online passcodes to all of these accounts? 
• Do you know how much you’re contributing each month to retirement, kids’ college funds, and savings? 
• Do all of these questions overwhelm you?

If you find your head spinning, it’s totally ok.

Take a deep breath. I know, that was mean.

Sorry, not sorry. I purposely rapid-fired these questions in your direction to show you exactly how knowledgeable or how lost you really are about your finances. 

We’re going walk through this step-by-step, together – me and you babe – right here in a calm and orderly manner. So, no need to panic. It’s going to be okay.

Chances are, you didn’t know the immediate answer to most of those questions. Not many people do, and that’s why you’re here, reading this – because you’re tired of feeling broke. Because average is boring, and because you want to create an abundant life you’re proud of.

Do this exercise with me and you’ll be feeling confident that you, without a doubt, know your numbers, which will help you decide what your next step will be.

If you’re getting a bit of anxiety and don’t know where to start or what to do, and your mind is 10 miles ahead of us running in a circle… reel it back in for me right now. 

You can’t learn to swim by just jumping into the middle of the lake. We’re going to start at the shore and wade in easily, with your feet touching the ground the entire time. 

You still with me? Good. Now hold my hand. We’re doing this together. 

Begin Gathering Information

You need details on every account you own and bill you pay. You probably can name several of your accounts right away, but for the rest, and so we make sure none are missed, you need a guide.

Almost all bills, obligations, and transactions fall into four simple categories – there are things On Your Credit Report like loans, credit cards, car notes, and mortgages

And then there are things that are Not On Your Credit Report like subscriptions, insurance, medical bills, utilities, and rent

There are your checking and savings accounts – whether you have only a couple of savings or many, checking and savings all fall into the Banking category

And then there are Investments, which are retirement accounts like 401ks, IRAs, these can be brokerage accounts where you’re trading stocks or investing outside of retirement, college savings, and real estate (aside from your primary residence).

Gather information on all of these bills and accounts (make it easy by following along with the free download) and a great place to start is with your credit report.

Your credit report will show the balances, who they’re through, and how many of them there are. Don’t focus on the credit score – at this point, it doesn’t matter what that number is, you’re only gathering account information listed by each creditor from the report.

Download the free checklist I’ve created specifically to help you navigate this step. With this free download, you’ll be guided through the exercise below toward having a comprehensive, clear picture of your financial situation.

Head to annualcreditreport.com to obtain your report for free. This report is available once a year, every year, for free. This exercise of pulling your credit report will confirm your existing account status and might remind you of old debts, medical bills, and even some things you may have forgotten about. 

In addition to requesting your credit report, pull out the credit cards you have in a drawer or in your wallet, and gather the latest statement for each one. Gather anything you have in files and any statements you’ve received in the mail. Collect your usernames and passwords to each account. 

It’s possible you may have to call companies if you can’t access the account online – have passwords reset, request an updated statement be mailed or emailed to you etc. Gather anything you’ll need for each account so that you’ll have access to or a copy of the most up-to-date balance, rate, minimum payment requirements, due dates, and payee information. 

Start assembling the pieces that will show the true and current picture for each account that you can think of. Remind yourself through this process not to get side-tracked and go down any of those rabbit holes – we’re just gathering information right now.

As you go down the list of loans and credit cards on your report, it may be useful to pretend you’re taking inventory of someone else’s business. Try to step outside yourself and look at things like a detective, maybe use your imagination a little. 

Use the space provided on the free download, starting with your credit report and then fill in any blanks based on the credit cards from whom you do have the most recent statement or online access. The ones you carry in your wallet and use often are probably going to be the easiest & hopefully the most current. Actually, if you want a more structured series of worksheets on which to track your progress and complete this, I designed the below-offered free download just for you. 

As you get further down the list, you may discover some things in collections. Start recording the phone number and name of the company so you can call to request a statement soon.

You Aren’t Alone

The average American has 2-3 credit card accounts, and some may have as many as seven, which can be pretty overwhelming. Most people under 35 years old have about 15,000 in student loans too, and that doesn’t count mortgages, car loans, or any of that other stuff that’s “normal” these days. 

The average American has 2-3 credit cards. Most millennials have at least 15K in student loans

So, remember to take this one at a time. I’ll be honest with you- when I started this process myself, I had more than 10 credit card accounts completely maxed out. Plus our mortgage and a car loan. It was insane – so that’s a little reminder that you CAN handle this!

Acknowledge The Judgmental Thoughts, And Keep Going

Brace yourself- portions of this process might be downright depressing. However, it’s important to have this reality check and understand the truth of the current situation so that you can equip yourself with the right tools and make moves based on your personal situation. 

It’s important to remember that these numbers don’t define you and that by taking this first step, you’re already a step ahead of where you were yesterday or last year or whatever.  

Don’t let the numbers or the information gathering process overwhelm you. You aren’t here to be shamed, you’re here helping yourself! You’re doing the RIGHT thing! Just making the decision to come to terms with your debt can definitely keep you up at night. I get that too. 

Walk away periodically, step outside to take a few breaths and come back to tackle a few more. Do two a day or maybe go have lunch and then come back. Do whatever it takes over and over again until you’ve completed this information gathering process for all accounts.

Gathering all of this information can be tedious and take some time. Depending on how many accounts you have to tackle, you may want to set aside several hours or even a weekend. Allow yourself a reasonable amount of time on this. 

I’d say anywhere between a day and a week or two is reasonable, depending on your schedule and the number of accounts you’re dealing with, but not longer than two weeks. Anything longer than that just tells me that you’re not really serious and you’re procrastinating. 

Urgency, Not An Emergency

Remember, just because you’ve decided to take action now (I’m so proud of you by the way) doesn’t mean it’s an emergency. So there’s no reason to stress, be impatient with customer service reps on the phone, or get angry at reset password prompts online. 

Yes, it’s urgent that you complete this step and be ready for the next one so that you can build wealth and change your family’s trajectory, that’s the whole point. But remember, while I appreciate a sense of urgency, this is not an emergency, and there’s no need to freak out.

You’re doing more toward the abundant life you dream of than you have at any prior time, so take pride in each call you have to make and online password you have to reset. Give yourself a pat on the back with each one, especially when you look at the numbers and feel like hyperventilating. 

Don’t hyperventilate or stress – that won’t help, only continued action will. 

Creditors – Check! On To Banking

The last and final piece of this information gathering process is to repeat the information gathering step above for all bank accounts, savings accounts, investment accounts, IRAs, HSAs, 401Ks, and anywhere else you may have any cash. 

Think about retirement accounts, kids’ college funds, health savings accounts, tuition reimbursement accounts, any savings funds offered through your employer, retirement funds from prior employers, online savings and even reward accounts that may be linked to your credit cards. 

You’ll need to gather statements, online usernames and passwords, and everything so that you can see balances and have a clear picture of what exists and where. 

Again, allow yourself time to accomplish this without stress or getting angry about things. Depending on how complicated and how long your financial history is, this might take some brain wracking, digging in file cabinets, online searches, and maybe even a call to your current or prior HR department. 

The whole point of these exercises is just to gather everything possible, for all accounts – debts, investments, and bank accounts – so that you’ve done all the legwork as far as accessibility. 

You can’t start making progress on anything if you don’t know where things are, how much they are, or don’t’ have access to the account. Once you’ve completed this information gathering process, things start to get exciting! (Yes, I nerd out about this stuff and get really pumped!) 

Okay, so you’ve gathered * all-the-things * 

Ready to keep going? The next step in the “Mama’s Abundant Money” series is about one of the main secrets to a successful financial journey! Make sure you’re a subscriber so you’ll be the first to know when new articles come out!