So you’ve screwed up your finances! Now what?

screwed up your finances

The personal finance blogosphere appears to have gained some serious traction over the past decade.  Blogs, such as this one, are aiming to help you and all others out there in the internet universe avoid the personal finance pitfalls life has so carefully laid out for us.

This help may come in forms of posts about expense tracking and budgeting.  Or about investing in retirement funds at work as well as on your own via brokerages.  All in all, we are the guiding (and hopefully entertaining) people while rambling on and on about what to do and not to do.

What I think we are actually doing a poor job at is looking at the glass half empty situations in life.  Yes, it’s great if your career is on track, your retirement funds are fully funded every year, and your brokerage account has yielded great returns these past years.

But what if that is not the case?

More often than not, taking the first step toward financial independence seems daunting.  What if you’ve screwed up your finances?  Is financial independence really a thought you can entertain?  Quite difficult, if you’re drowning in bills and barely make it from month to month.

No matter what your situation is, you can reach your very own version of financial independence.  It’ll take work.  But it is absolutely possible.  You just need to be willing to go the extra mile, most likely make some sacrifices and more importantly believe in yourself.

The messages of the posts you read on personal finance blogs might appear out of reach now.  But there is nothing standing in your way of working toward your goals.  It doesn’t matter if someone else is better off at the moment or has reached their goals sooner.  You can get there at your own pace.

screwed up your finances speed

Screwed up your finances?
Let’s set up your steps to reach your versions of financial independence!

Yes, there can be multiple versions.  Who says you need to go from 0 to 100 in under 10 seconds all at once?  No one!  How about taking baby steps instead and developing multiple goals leading up to your ultimate goal?  That is a much more manageable approach to take.

Once you have figured out what your final and “in between” financial goals are, it is time to take the first step.  And that, more often than not, is the most difficult step to take.  Why?  Because it means changing your status quo.  And that is never easy.  After all, who likes to change their habits?  I promise the results will be very rewarding!

How have you screwed up your finances?  Are you in debt?  Student loans are the biggest problem amongst us.  How about credit cards?  It is so easy and very tempting to spend money we don’t have.  Are you behind on bills or making minimum payments only?  Many of us have been there and admitting your financial problems to yourself is what you need to get started.  Read this

Step 1

Spending less than you earn is key to financial success.  So your first step is to know what you are spending your money on.  I can honestly tell you that some expenses will surprise you.  Just like I got a surprise of my own.  A couple of dollars spent here and there add up fast!

Check out these easy to use templates to get you started.

Expense Tracking Template (Annual)

Expense Tracking Template (Monthly)

Step 2

Once you have figured out what you spend your hard earned cash on, your next financial goal is to budget for the rest of the year.  This one is going to be tough.  Take a good look at all your expenses and cut out all unnecessary spending.  Saving cash has to become your number one mindset.

Check out this easy to use template which includes a budgeting section.

Expense Tracking & Budget Monthly Template

Step 3

Now that you know how much disposable income you have, it is time to pay off all your debt.  All of your savings potential will now turn into debt crushing ammunition.  At all times, pay off the debt with the highest interest rate first (not the lowest balances).

Check out this guide, outlining how to pay off your debt fast and get on your happy dance.

Debt Pay Off Guide

Step 4

Once you’ve mastered the first three steps, do you still think you’ve screwed up your finances?  I don’t!  To the contrary, I think you are well on your way to financial success.  Step 4 is saving for retirement via work-sponsored programs.  At a minimum, contribute enough to collect the match.  Also known as free cash!

Check out this definitive guide to retirement savings accounts all in one place.

Retirement Savings Account Guide

Step 5

You’ve mastered your expenses, budgeted like a boss, paid off your debt, and invested in your work-sponsored retirement account.  Kudos to you!  Your financial situation is getting better day by day.  Do you have additional disposable income?  Can you cut more of your expenses or pick up a side hustle?

Check out this investment series and venture into the world of investing outside of work.

Investing for Beginners

Index Investing

Set up a Brokerage Account

Choose your Investments

Do you still feel like you’ve screwed up your finances?  Or does it seem financial success and comfort seem much more accessible now?  You can do anything you set your mind to.  That includes fixing any past financial mistakes you might have made and getting on track to a happy financial future!

So is there any truth to the financial independence concept?  Is it a prank or reality?  Reality of course.  Achieving your financial goals and even independence from the daily 9-5 grind is absolutely a possibility.  Check out the below posts to determine what your ultimate financial goal should be.  Then start tracking, budgeting, saving, investing, and living!

Achieving Financial Independence … prank or reality?

The 4% Rule: The opening bid of how much money you need to retire comfortably!

Check out this complete listing of posts for more fun personal finance reads.

6 thoughts on “So you’ve screwed up your finances! Now what?

  1. Thank you for taking the time pause and look back for others who are all in this financial journey.

    You are spot on. We love to talk about successful ways to do this and that and, oh by the way, the market is on a tear so all of the Net Worths are going great. But the true lessons are learned from the stories about our failures.

    After getting burned multiple times by contractors repairing a rental home, I inserted advantageous terms in the purchase order and am not so quick to pay before the work is done and approved. (<= as an example of a failure)

    In the end, it's all about grinding it out. Every month, cutting an expense to save money is not easy. Takes discipline and commitment to save and then commit those dollars to an investment.

  2. Definitely reality! I’m still very new in my journey towards FI but I’m lucky because I’m starting from no debts, a steady income and a roof I own already over my head. For me, it’s all about retirement and investing from here onwards. It’s still very daunting however, as the years tick on by, you wonder if you will really be able to achieve FI. But the only way to get there is by starting. This post was great in detail on how to get there, good read!

    • Financial Muse says:

      Thanks! It’s great that you have such a great start. Now it’s all about patience and sticking to the plan!

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