Do you feel like you’re just getting by, or maybe not even that? Did you have financial goals from last year that you never met? Are you wondering “man, what in the world is an IRA and who’s Roth?” If that’s the case and you’re lost in personal finance, then stick around. 

My name’s Jay and this post is all about how to get your life together, starting with your own finances. As you can already tell, I’m not a large business, I’m not a company with a staff of writers, I’m just a guy. A money guy. My goal with this site is to help share some information with others about how I got my life back on track because I made a LOT of money mistakes in my teens and twenties. I know how daunting it can be when you don’t start off the right way, and I’m here to help get you back on track. 

I’m writing this first post for the site on the very last day of January, and that’s intentional. We’re at the point where the high of following a New Year’s Resolution has really tapered off. This is the time to check in. Are you actually sticking to that budget? Did you set up that emergency fund? Did you start paying down that debt? 

If you didn’t, that’s okay, but let’s talk about it. Below I’m going to cover everything I can for the complete beginner when it comes to personal finances. If you’re new to the site, welcome, and I hope you hang around as I build things out more. Let’s jump into it. 

Step 1. Relax. This Can Be Fixed 

Hey man, take a breath, it’s okay. I already know how you’re feeling. Trust me, I was behind on credit card payments, had some stuff in collections, student loans were in default at one point. You name it, I’ve probably dealt with it. 

However, you’re doing the right thing right now. The first step with anything is realizing something’s got to change, and if you’re here then you’ve made it that far. Good shit. 

Give your past self some grace and look forward. There are a lot of times in this process that you’ll be very, very annoyed/angry/upset at your past self, that’s okay, but don’t spend time on it. As the old saying goes, the best time to start was 5 years ago, the next best time is to start right now. So let’s do that. 

Step 2. Take Inventory of Your Personal Finances

Alright, so we know we need to make some changes, great. Before we can start developing a game plan though, we’ve got to know the whole situation. There are a few different ways to go about this, but the end result is the same — what does my situation look like? 

Important things to know for this one: 

• How much money do I have? (We’ll discuss liquidity in another post)  
• What’s my monthly cash flow look like? 
• How much do I owe in total? (This includes current debts and collections) 
• What are my goals? (Long term, short term, etc.) 
• Do I have a good attitude? (Arguably the most important aspect)  

I said there are a few different ways to do this, but for an absolute beginner let’s keep it as simple as possible (that’s what I did). Go get a big notepad or just a blank sheet of paper and write it out.

How Much Money Do I Have? 

Do you know how many accounts you have? This may sound like a silly question, but if you ever had some of the really bad mistakes like I did…. you know the ChexSystem (it’s okay, I’ve been there too). 

For those with a particularly rough financial history, you could have had multiple checking accounts after going negative in some and changing where your next paycheck gets deposited to, etc. And eventually you found out you can’t even open a new checking account anymore! If that’s you, it’s time to start digging. Let’s figure out how many checking accounts you have total and look to consolidate in one place to make things easier. 

After checking, let’s take a look at savings accounts as well. Chances are if you’re working on cleaning up a financial mess, you may not have any active savings (I’ve been there too, don’t worry). But even if it’s just $20, let’s account for it. Tracking and knowing where your money is will be crucial for this financial journey. Write it down on the paper. This is our starting point. Do not include any expected money, just what you currently have. We’re not worried about future paychecks at this step. 

What’s My Monthly Cash Flow? 

We know how much money we have on hand, now let’s look at a typical month. This is where we have to start doing some work. Again, there are a lot of ways to do this with various apps, but for this first time I genuinely think it’s best to sit down and write it all out. Time to login to our bank(s). 

Whatever month you’re reading this in, let’s pull up a bank statement from the previous month. What I want you to do is just create two simple columns: “income” and “expenses.” Go ahead and write it out next to your money on hand. Now the daunting part. 

We’re going to go through the entire month, starting from the first, and tally up income and necessary expenses. Here’s what I mean. 

Income 

On the left, you have “income.” For this, we’ll include typical paychecks and any other payments you receive. We’re using bank statements and not paystubs because for this step we’re only concerned with net income, meaning the amount of money hitting your account each month. You may have additional income beyond regular paychecks (or maybe instead of regular paychecks) so let’s include that too. Things like DoorDash, Uber, or any other kind of side hustle we’ll add and can come up with an average later when budgeting.

Expenses

In the righthand column, we’re going to tally up our necessary expenses. Let’s call these “needs” (we’ll get to budgeting later). These are exactly what they sound like — the things you need to spend money on each month to live. This column includes things like: rent or mortgage payments, car payments, car insurance, home or renter’s insurance, phone bill, fuel, student loan payments, credit card payments, etc. You get the idea, this is the no-shit stuff that needs to be paid each month. Write the amount and what it is in the column. 

Note: There are two types of expenses, fixed and variable. Something like your car payment is easy to tally since it stays the same (fixed). But for the trickier expenses like groceries, just add the trips up for the month to get a total, and we can compare that to previous months and start looking at an average. We’ll do the same with fuel and really dive into it when we get to budgeting.

Cash Flow 

Great, we’ve got all the numbers written down. Let’s do some super simple math. Grab your phone, open your calculator, and add all your sources of income together to come up with a total monthly sum of money that hits your account each month. Now write that at the bottom of the left column. 

Perfect, now we’ll do the exact same thing for the column on the right. Look at all your necessary expenses, add them up, and write that number down at the bottom of the right column. Now the fun part: subtract the number on the right from the one on the left (income – expenses). The resulting number shows us how much money we have to work with on a monthly basis. Right now we’re not worried about a set number, percentage, etc. this just gives us a baseline of where we’re at. 

What Are My Debts? 

This next step is very important for gaining a complete understanding of our financial situation, and it’s not the most enjoyable. We need a real, no-BS idea of how much money is owed in total. This can be current credit cards, car loans, student loans, and anything you may have in collections. Most of these you’ll know already, but if you’ve had some rough patches in the past, there’s only one way to know for sure, and that’s to check your credit report. 

You’re entitled to a free credit report every 12 months under US Federal law and can find yours at AnnualCreditReport.com. In your report you’ll see everything that you owe and can verify that there aren’t any mistakes, which can certainly happen. Now, I’m not a credit repair agency, and there’s a lot of legal stuff that goes into certain credit “hacks” and what is or is not the best way to go about paying off debts, so we’ll keep this part limited. For now, I want to use the credit report just to count up all the debts I owe that are actually mine. So let’s find those and start writing them down. 

When looking at debts there are some important numbers we care about in particular. 

1. How much is the debt? Take note of the total amount you owe for that specific debt.
2. What interest rate am I paying on this debt and are there additional fees? Write that down.
3. What is the minimum monthly payment to keep this debt in good standing/on-time (if it is current)? Normally I hate talking about monthly minimums, but this is crucial for working our budget later. 

Now we know what the damage is — that’s the hard part. But I mean really, it wasn’t that bad, was it? You don’t have to talk to any debt collectors, no phone calls, no in-person visits, just a simple list of everything we need to clean up. Cool, let’s save those numbers for later. 

What Are My Personal Finance Goals? 

Alright, we’ve got the raw data. Numbers written down. Accounts checked. We even looked at our Credit Report (scary). Now let’s talk about what we want to do. None of this really matters without intention. Do we need to prioritize paying down debt? Have we started contributing for retirement? Or are we really just focused on staying above water and not worrying about next month’s bills? 

For the sake of this guide, I’m going to walk through the steps as if our financial situation is in complete turmoil because, well, mine certainly was when I first started. That means our goals are: 

1. Put together a monthly budget so I know where my money is going every month 

2. Establish a small emergency fund that I will build out later 

3. Get all my debt current and begin paying it dow

4. Relax and trust the process, knowing that I didn’t end up in this mess overnight, and it’ll take more than overnight to fix it (that’s okay). Which brings us to the last section of taking inventory…

Note: Go ahead and write these down on that notepad as well. This will help us have an all-encompassing picture of things on one piece of paper. We know where we’re at, we know what we need to tackle, and we know what we want to do. 

Do I Have a Good Attitude? 

I know, I know. This one sounds a little touchy feely whatever. But seriously, this is really important. This part goes hand in hand with intention I touched on earlier. We need to be serious about this. Like I said, you (and me) didn’t get into this mess in one day, so it’s going to take a while to get back on track, and attitude and mindset is how we stick to it. 

You can cut your past self some slack and still recognize that things need to change. So don’t beat yourself up over mistakes that you can’t control anymore and look forward instead. We’re going to fix it. Yes, it’s going to take some time. Yes, that’s okay, it’s a process. 

Step 3. Make a Personal Finance Plan 

Game time. Now, for the sake of the website and my own sanity, we’re going to break this one down into several different posts. The basic thought process here is that we need to make a budget, we need to start paying down debt, and we need to be prepping for emergencies and retirement. 

Pretty much any personal finance advice you find online is going to say the same thing. And that’s for good reason, that’s the exact same blue print we’re going to follow. However, I’m breaking these topics down into separate posts so they’re easier to digest and get back to quickly for reference. But here’s our gameplan. 

1. Create a budget [LINK]
2. Create initial emergency fund [LINK] 
3. Pay down debt [LINK] 
4. Prepare for retirement [LINK] 
5. Enjoy life 

Step 4. Execute 

It really isn’t possible for me to talk about this one enough. Stick. To. It. This is where people run into issues and it’s why I talked about mindset and attitude. You’re in the right place, you care about fixing things, so just keep going. I know it’s not easy, I know it’s not fun. That’s fine. Everything will be fine. 

I can’t tell you the number of times I sat down and thought “okay, I’m really going to fix it this time” and then eventually fell into the same pitfalls. If you didn’t get it the first time then you know what? That’s fine, get it the second. Didn’t get it the second time? That’s fine, let’s try again. You get the idea. If there’s one thing you take from any of this, it’s that’s fine, let’s fix it.