If you’ve been avoiding looking at your bank account lately, it’s a pretty clear sign that you need a financial makeover. And if you’re anything like most people you may have no idea where to start.

Personally, I’ve found that the best way to kick-start a financial makeover is to keep it simple.

Before you go off and hire a financial planner, download a budgeting app, or enroll in a budgeting course start by getting a clear picture of where you with your finances; using a pen and paper. Without a firm grip on what it is that you’re working with it’s tough to start mapping out a course for long-term financial security.

The steps below are intended to help you paint a clear picture of where you are financially and inspire you to begin creating an effective financial plan. Going through them may be uncomfortable, but it’s the best way to get started with your makeover.

Make a list

Start by laying everything out on paper. Write down your take-home pay, make a list of your debts, yearly bills, and your monthly bills. Put every single expense that you have down on paper. Go through old bills and start creating a visual of your finances. Don’t cut corners and estimate how much you owe on your credit cards(s) or how much you spend on transportation each month. Look everything up.

Pull out a calendar

Once you have all of your financial responsibilities listed out it’s time to create reminders of when your bills are due. Before you start thinking about paying down debt or investing; make sure you’re current on your bills.


Now that you’ve listed out when your bills are due and for how much, you’ve pretty much laid the groundwork for a very simple budget. Tally up all of your fixed monthly and mandatory variable expenses (such as credit payments) for the month, at a minimum, this is the amount you need to set aside each month to remain current. These are your expenses that provide little wiggle room when budgeting. Your other variable expenses such as groceries allow more flexibility. With a little imagination, you can stretch your grocery budget, but you don’t have much flexibility with rent – it’s the same amount each month.

Go cash only

While you’re working on reorganizing your finances, it’s in your best interest to stick to cash. You are less likely to overspend. The only exception is your debit card, but even that should be used sparingly. If you have automatic bill pay attached to a credit card, it’s time to switch it over to checking. Avoid using credit. Take the card(s) out of your wallet. Travel with your debit card for emergencies. Until you are debt-free using a credit card (no matter how enticing the rewards) is a bad idea.

Save a little

There’s no getting around the fact that having a savings is important. Life is unpredictable. Things come up unexpectedly all the time. Having a little savings can make a huge difference in your overall financial and mental health. Not only can it keep you from using your credit card when an emergency pops up but it can also provide you with a little piece of mind. Knowing that you have some money set aside can help you subdue the stress that comes with financial instability. Don’t underestimate the impact having as little as $100 set aside can make on how you feel. Ideally, $500-$1000 is helpful for those unexpected emergencies. If your finances are extremely tight, then aim for $250-$500. It may not seem like much, but it’s significantly more than $0. This isn’t about wealth creation. Don’t worry about having 6 months to a year worth of living expenses (that will come later). It’s about creating a foundation.

Once you’ve sorted through everything and have a clear picture of where you are financially, then you can start the real work.

It takes a lot of time and effort to identify the budgeting/saving/retirement strategy that will work for you. There are countless financial resources available. Seek out the “experts” that understand your financial situation, surround yourself with like-minded people who are determined to improve their finances (like The Elegantista community), and experiment with different techniques until you find one that works effortlessly for you.

I’ll be the first to admit that personal finance is tricky and frustrating, but if you want to create a life that you love you can’t ignore it, and the steps above are an easy way to help get you started.

Image iStock