Key Steps To Get Your Financial House In Order Now

Financial house

Often what keeps many of us from getting our financial house in order is not knowing where to begin. Excel spreadsheets, budgeting apps, accounting software, budgets, spending plans, savings, investing! Ah! The overwhelm is real.

Not to worry though! In this article, you get all the information you need to get started confidently! But first up let's talk about why getting your financial house in order is so important.

The importance of getting your financial house in order

Just like having your home in order gives you a sense of peace and pride, getting your financial house in order will save you time, worry, and give you peace.

There's nothing more stressful than having your finances disorganized especially when you are trying to figure out your finances. Essentially, by prioritizing your financial house you are putting your financial wellness first.

Steps to get your financial house in order

All of that being said, it doesn't have to be complicated to get your financial house in order and your finances back on track.

Pick a day and set aside some time to focus on one area of your finances. Below are some simple steps to get your financial house in order.

Forgive yourself

I don’t know about you, but I didn’t take a single class in high school or college that taught me how to manage my finances. Most of us haven’t. So forgive yourself for any financial mistakes you may have made.

Try not to focus on what you have or haven’t done. The fact that you are reading this article means you are ready to take the steps necessary, starting today, to get your financial house in order.

Discover your numbers

Getting up close and personal with your finances is really important. You don’t need to look at bills or statements for the past 3 years, but knowing where you are starting from is key.

Take a look at every bill, credit card, and checking account statement for the past month or two. What do you notice about your spending? What patterns do you see about your expenses?

An easy way to begin is by making a list of all of your essential vs non-essential spending. Decide on what is a need versus a want.

Being able to pay for food, shelter, and transportation costs are examples of needs. Knowing what your basic or essential expenses are will you decide which financial tools are best for you.

For example, knowing the amount of money you spend on the essential expenses will help you determine how much money to keep in your savings account in case of a sudden job loss.

Secondly, determine how much of your income is going to discretionary or non-essential expenses. Is that Amazon Prime subscription a need or a want? Is the weekly trip to a nail salon or your favorite diner an essential expense? Decide the categories that matter to you most.

Lastly, decide how you will track spending in the next month. Some simple ways to do this are by using a cash envelope system, an app, or a simple notebook and pen.

Create a spending plan

Now that you’ve decided what you’ll use to track your spending, it’s time to create a spending plan for how you’ll spend and save your money before you get paid.

Get clear on what your financial goals are. Think about both your short and long-term goals. Creating a plan with weekly or monthly steps to get you closer to your end goal will shape your spending plan. I am a huge fan of the “pay yourself first” method.

Decide how much money you want to set aside for your financial goals before you begin spending money can help you create a healthy savings habit. I prefer spending plans over budgets because they allow for flexibility.

Once I’ve set aside money for savings and investing goals the rest of my income can go to take care of all of my wants and needs. There is no single way to create a financial plan. It's all about finding a system that works for you.

Get an accountability partner

Have you ever tried to reach a fitness goal on your own? It’s hard, isn’t it? An accountability partner will help you feel motivated and help you be more consistent.

If you can’t seem to get past step one, finding someone who is on the same journey or who has been on a similar journey might help.

Ask a friend, partner, spouse, or hire a financial coach. A financial accountability partner can keep you on track.

How to protect your financial house

As you are getting your financial house in order, it’s also important to protect it. It’s time to think about other ways to protect your financial house by reviewing your insurance policies.


Although insurance coverage may not be the most exciting thing to tackle, reviewing your insurance coverage not just for the items listed above but also things like homeowner’s, vehicle, and business insurance is one of the best ways to protect your financial house. It’s all about managing risks and losses.

Health insurance

One of the biggest debts, second only to student loans, that causes Americans to file for bankruptcy is medical debt.

According to CNBC, Americans have $1.6 trillion in student loan debt but what often drives us to financial ruin is medical bills.

Ensuring you have proper health insurance coverage is one way to avoid financial disaster. Medical care can have a huge price tag and healthcare coverage can protect your financial house. 

Life insurance

Life Insurance is a great way to protect your loved ones. According to the National Funeral Directors Association, the median cost for viewing and burial is $7,640. That figure does not take into account costs for flowers, obituary, or cemetery fees.

A good life insurance policy isn’t simply there to cover funeral expenses. Most importantly, life insurance policies are to help provide financial security to your loved ones if you were suddenly unable to provide it.

Life insurance is meant to help replace the loss of income. Many of us don’t want to think about life insurance, but it’s not about you. It’s about giving your family benefits to your loved ones to help pay for ongoing living expenses.

Disability insurance

Similarly, disability insurance is another type of policy that provides cash when it’s needed most. If you were suddenly unable to work due to an illness or accident, disability insurance provides a monthly income until you were able to return to work.

There are short and long-term disability insurance policies available. Although it may not replace your total income, it’s a tool that can help protect you from a total loss of income.


We often talk about how housing, food, and transportation make up the bulk of expenses, but don’t forget to consider ways to reduce your taxes. According to the Tax Foundation, Americans spent more on taxes in 2019 than they did on food, clothing, and housing combined!

Some of my favorite ways to begin wealth building are also ways to reduce your tax bill. Here in the U.S., the IRS incentivizes those who save and invest for their future. Retirement savings is a great way to reduce your taxable income. Getting familiar with the variety of retirement savings accounts is a great place to start reducing your taxes.

We’ve discussed protecting your financial house by using risk management tools like insurance. Getting your financial records in order is also needed as part of your financial toolbox.

There are financial documents that you will need to keep for several years like tax returns. While documents like mortgage papers and a will, you’ll want to keep forever. Creating a filing system and getting organized is one of the easiest ways to start.

Along with getting your documents in order, understand what documents you may need to create like a will, trust, health care directives, and durable powers of attorney.

The use of a will is a way to pass assets (things you own) to your loved ones. Having a will settles disagreements about which individuals receive your belongings.

If your not ready to take the step to create a will, at the minimum, review your financial accounts including, checking, savings, and retirement accounts for beneficiaries. Have you listed who these accounts should go to if something should happen to you?

Legal documents like a will, living trusts, and health care directives ensure that your wishes are respected. It also removes the burden and possibly minimizes disagreements between your loved ones about what your desires are.

Organize your financial house today for peace of mind!

Getting your financial house in order reduces stress in the most stressful of times. Thinking about things like job loss, illness or death are things we all want to avoid dwelling on. However, getting your financial house in order minimizes the worry during life’s toughest circumstances.

Think of it this way, you are not only organizing your financial house for yourself. It’s also a selfless act. When you are clear about what your wishes are, you eliminate your family and friends from guessing. Better yet, you avoid having a court decide what they believe you wanted. You get to decide.

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