Getting Your Financial House in Order

Welcome to February!

I know I’m a little late here, but events have delayed me a bit.

Each month in 2018 we’re going to be diving into a different area of life. I’ll be exploring topics that will help improve my life while explaining everything I learn along the way.

February will be when I dive back into personal finance basics.

I spent a lot of time on personal finance basics a few years ago. However, once I got everything under control I put it all on autopilot.

And that’s great! Autopilot means that I don’t need to spend any time thinking about finances. I can use my time for more important things and know that my money is stable and growing. Hooray!

The problem is that when there is a big shock to the system, everything gets thrown out of whack. And boy is having a baby a shock to the system!

There are all sorts of new expenses involved. We’re now paying for a bigger apartment, day care that costs as much as college tuition, more clothing, bottles, toys, so so much more laundry, and plenty else.

Plus, there are other savings goals and new priorities that arise with the addition of a new family member. There are a lot of new things to consider.

On top of that, my wife and I have changed up our approach to handling money as a couple (which will be explored in a future article).

In short, we need to start a new plan.

And starting any new plan requires understanding the full picture.

Where Are You

As we’ve learned before, the first step in improving your situation is figuring out where you are.

This is especially difficult in the realm of personal finance because it is easy to judge ourselves and our progress.

We need to remember that there are no fresh starts. If we want to improve our situation, we need to understand what our situation is.

Step one in this process is getting mentally comfortable with our finances. This is trickier than it sounds.

Money is a loaded topic in our culture. We judge how other people spend their money. We judge how much money other people make. We compare our incomes to the people around us.

It creates an emotional hurdle to getting a clear picture of our finances. We need to clear this hurdle before actually taking any active steps towards fixing our finances.

Plan Without Judgment

My bills don’t disappear if I refuse to open the mail.

The same is true of our personal finances. They are what they are whether we are paying attention to them or not. Burying our heads in the sand may feel less intimidating, but it won’t help us improve anything.

This is the most important thing to keep in mind before beginning this process. It may feel painful, but nothing bad can come of it. Understanding how bad things are is necessary to making them better.

Plus, maybe things aren’t that bad! You never know until you take the time to investigate.

We’re not looking to judge how well or poorly we have done so far. We’re not trying to compare ourselves to our friends or coworkers. We’re just gathering intel so that we can create a battle plan.


Once we have mentally prepared ourselves, we need to gather all of our information in one place. This includes information on our bank accounts, income, retirement accounts, credit card spending, debt accumulation, and any other spending or assets.

I like to use Mint for this. A lot of bloggers recommend Personal Capital (potentially because Personal Capital pays bloggers a referral fee and Mint does not) but I’ve found that my accounts sync more smoothly with Mint.

The actual system you use is unimportant. The important thing is that you have a system. Whether that is Mint, Personal Capital, some other app, or your own spreadsheets, just gather everything together somewhere.


Next comes the analysis.

Where is your income coming from? How much is it? How frequent? Is it stable and consistent or sporadic? Do you have multiple income streams or just one?

How much are you spending? On what?

Categorize your spending and compare the numbers to what you expected to see. Are you spending more than you thought eating out? Are you spending less than you’d like on gifts for family?

Does your spending reflect your values? If a stranger were to look at your spending, would they get a fair view of what is important to you? Do you approve of how your money is being spent right now?

What debt do you have? What are the interest rates? What is the minimum payment on each? What are you paying now?

Don’t feel compelled to try to fix everything at this stage. That can feel extremely overwhelming and we don’t want anyone giving up.

Instead, just spend some time getting a clear picture of where your finances stand right now. Making a plan to improve them will start next week.

Join the Conversation!

Do you have your financial house in order? Do you agree with my approach to getting a full picture? What steps would you add or subtract? Do you have advice for getting over the emotional hurdle that finances pose? Let us know in the comments!

4 thoughts on “Getting Your Financial House in Order”

    1. The investment analysis never worked for me because Personal Capital just lumped my 401(k) account into a big gray “unknown” box. Mint is definitely weak on investment analysis, so if Personal Capital works with your accounts, then that’s a great addition.

      Thanks, Brad!
      Matt recently posted…Big Money ChangesMy Profile

  1. I use Mint to track income and expenses and Personal Capital to track investments. I’m not an affiliate of PC right now either so that’s my non-biased recommendation.

    These basics you laid out are key. Know where you stand and then come up with a plan. You’re right that “They are what they are whether we are paying attention to them or not.” If you don’t pay attention, they are not going to get any better though.
    Jason@WinningPersonalFinance recently posted…Back Off, I’ll Mind My Own Savings RateMy Profile

    1. For whatever reason Personal Capital doesn’t analyze my 401(k). I guess the accounts don’t sync well or something. I’ve heard that if the accounts work it is a great tool for that, though.

      Thanks, Jason!
      Matt recently posted…Big Money ChangesMy Profile

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge