21 Easy Action Steps for the Financially Overwhelmed

People often tell me they feel overwhelmed at the thought of working to gain control over their money. I get it. Starting with tens of thousands of dollars in consumer debt, we were overwhelmed too. Still are some days. Some days the steps we are taking to become debt free and build wealth seem so incredibly pointless that we wonder if it’s even worth trying.

But the truth of the matter is that every little bit helps. Every extra dime you put toward debt, in retirement savings or in your emergency fund is another dime you’ll have to produce financial security. And those dimes do indeed add up over time.

So for those feeling overwhelmed by their finances, I thought I’d share a few action steps that are quick, easy and will make a difference over time when it comes to improving your finances. The tips are kind of “set it and forget it tips” that won’t add to your feelings of being overwhelmed but will help improve your finances.

The first three tips I’m going to share aren’t as easy as the rest, but you can still do each of them in less than fifteen minutes and by completing them you’ll establish a firm foundation for having success with the other action steps.

The Foundation

1. Write Down Your Numbers

This might seem scary, but believe me when I tell you it’s a powerful tool that will help you get motivated to take your action steps. Write down who you owe, how much you owe them, the monthly payment and the interest rate. In another column, write down all assets including savings, retirement, homes, cars, etc.

2. Make a Quick List of Your Financial Goals

And don’t just write down “I want to be debt free.” Write “I want to be debt free so that……..”  This is your motivational list of whys that will help you stay on track with your action steps.

3. Write Down Your Monthly Expenses

Better known as a budget. Write down your financial obligations, how much you spend (or should be spending) on groceries, gasoline, etc. Every step toward financial freedom will help you reach your goals faster.

The Building Blocks

These are the “set it and forget it” action steps that will pave the road for improving your finances.

4. Set Up an Automatic Transfer Between Your Checking Account and a Savings Account.

Coordinate the dates with your paycheck arrival. Use a savings account that is difficult to access. Make the dollar amount small enough that you won’t really miss it and make a commitment to forget about the money until a truly important purpose comes along.

5. Start Equating Purchases with Pay

Whenever you’re tempted to spend money you don’t need to spend, ask yourself how many hours you need to work to pay for the item. For instance, if you make $20 an hour and want to buy a $60 pair of shoes, you’ll need to work three hours to pay for those shoes. Is three hours of work at your job worth the purchase? If not, put it back on the shelf.

6. Increase Retirement Contribution

Use automation and remember that it doesn’t have to be a large amount. Increase contributions by one percent, or commit to putting $25 a month into an IRA. Just add a bit more each month and let compounding interest do its wondrous work.

7. Commit to Stop Using Credit Cards

Choose to stop relying on credit cards to make up for income shortfalls and to live within the money you make each month. I’m betting you won’t miss the “extras” you used to buy very much once you see the card balances start going down.

8. Add Just a Little Extra to Debt Payments

Again, $10, $20, or $50 will do wonders over time. Just make a commitment to add an additional $10 to each minimum loan or credit card payment and watch the numbers drop faster than you’d imagined.

You can also use goals for increasing motivation. For instance, we’re set to reach a mortgage payoff milestone, and I wanted to reach it by the end of the year. I figured out that we can reach our mortgage paydown milestone by adding a measly $10 a month to our mortgage payment for September, October, November and December. I could’ve just waited it out and reached the milestone in January, but won’t it be fun to start the new year with that new, lower balance?

9. Trade in Dinners Out for Cooking Nights at Home

Cooking at home can be really fun, especially if you’re trying new things or working to mimic your favorite restaurant meals. And the money you don’t spend at restaurants can go a long way in improving your financial situation.

10. Practice Thinking Big Picture

One of our huge budget sucks was going out to eat. We justified the $250-$300 per month expenditures by telling ourselves that we “deserved” a relaxing night out because we worked so hard.

Eventually we learned that we deserved financial freedom more than we deserved a relaxing night out, and those dinners out became more of a punishment than a reward. We now eat out very rarely and don’t miss it at all.

Figure out what your big picture goals are and start putting them in place of your short-term thinking.

11. Start a Change Jar

Throwing all of your change in a jar can add up to several hundred dollars a year that can go toward debt or other financial goals.

12. Practice Gratitude and Contentment

Compare yourselves with those who have less instead of with those who have more. Volunteer at a food shelf or other organization that helps the needy. Thank God for five things each day. Read stories from the Great Depression. Practicing gratitude and contentment will help you to think twice before spending money you don’t need to spend.

13. Sell One Thing

Pick out one item that you own but no longer use, and sell it to a family member, friend or a person on Facebook or Craigslist.

14. Make a Menu Plan

Make a list of thirty meals that you and your family like to eat each month and shop so you have the ingredients on hand. This will help you avoid unplanned trips to the local take-out or sit-down restaurant.

15. Trade in Cable or Satellite for Netflix

Cable and Satellite subscriptions cost between $30 and $150 a month. Netflix is $10 a month. What financial freedom gains could you make with an extra $240-$1680 a year?

16. Calm Your Schedule Down

Reduce activities and social event commitments. Spend more time at home relaxing. This will help you avoid “stress-reducing” expenditures.

17. Brown Bag it to Work

You don’t even have to do this every day. But for every day you do it, put the money you would’ve spent on eating out into your change jar or transfer it from your checking account to your savings account.

18. Surround Yourself With People Who Are Also Seeking Financial Freedom

If there’s no one in real life, start reading lots of personal finance blogs. Camaraderie builds strength and solidifies good financial decision-making.

19. Read a Book That Will Motivate You

Reading books by people who’ve found the key to financial success is very, very motivating. Some of my favorites are:

Money Love: A Guide to Changing the Way That You Think About Money This book shares the story of a woman who dumped a half million dollars in debt after she figured out why she was spending in the first place.

The Total Money Makeover: A Proven Plan for Financial Fitness Loaded with stories about regular people who got out of debt and contains a nearly foolproof plan for dumping your own debt.

Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Finish Rich Book Series)   Because it’s never too late to start working toward financial freedom.

By the way, most libraries have Total Money Makeover and Start Late, Finish Rich available, so if you’re not interesting in owning them, check them out at your local library.

20. Drive Nice

Obeying all traffic laws and driving gentler on your car will reduce gasoline consumption, stress levels and will help your car to last long and have to be repaired less. It all adds up!

21. Cut Down on Energy Usage

Turn the lights off. Turn the thermostat up two degrees in the summer or down two degrees in the winter. Use less water. Pretty soon the changes will become so automatic that you wouldn’t notice them except for the lower energy bill.

And remember, you don’t have to do all of the things listed here. Just do one. Or two.

The point is to make little, easy steps of progress that will eventually add up to big results.

What suggestions do you have for easy steps of progress that will improve finances and help reduce those overwhelming feelings people can have about their financial situation?

20 comments on “21 Easy Action Steps for the Financially Overwhelmed

  1. Great list! Love all the steps here, Laurie! It’s so important to write down financial goals and the “whys” behind them. Then it’s laid out there – this is what you need to do and this is why you’re doing it. It also helps me to break down the larger goals into smaller action steps that I can achieve in a shorter amount of time (small wins).

  2. Great advice. I love the suggestion to pare down your activities to reduce your stress spending. It’s true that when our schedule is busier, we spend more on take out/eating out, gas, sometimes clothing, sometimes child care, sometimes the activity itself. Doing a bit less can add quite a bit more in terms of quality of life as well as helping your finances.

  3. A great list! Organization is a great first step. #5 -Start Equating Purchases with Pay is one of the things we talk with our children about. Now that 2 of our 3 kids our working is much easier for them to make that connection and they think twice about purchases now.

    1. That is so powerful, Brian. I’m so excited for your kids that they are learning to equate purchase with hourly work. I think that is a huge lesson. We are doing that with Maddie too as she builds her freelancing career.

  4. Track your spending Whether you use a spreadsheet or a tool like Geltbox money . If you don’t know where your money goes, it can be difficult to find opportunities to save. Keep track of your spending habits to help identify areas where you can cut expenses.

  5. Awesome list Laurie 🙂 You are right; adding even just $5 or $10 extra to your debt repayments each month definitely adds up over time. Slow and steady wins the race, right? 🙂

  6. I love this list.

    When I had a mortgage I use to play around with a loan amortization sheet in excel. (I’m not that smart to create it myself, it’s a default excel program where you plug in chug numbers 🙂 )

    I would see what happens when I paid a little extra each month and it was astounding how much money I would save in interest. This helped turbo charge me to pay off my mortgage and keep me on track when I wanted to divert from the plan.

  7. I like “Sell one thing”. Despite two garage sales and a major de-cluttering effort since starting our journey out of debt, we still have quite a bit of excess stuff. The idea of sorting through it and organizing it for a sale or even online listings can be overwhelming. But selling one thing? Yep. I can do that. It’s important to make goals that you can actually achieve. Good psychological fuel for a sustainable effort.

  8. Number 17! Bringing a brown bag lunch from home has saved us a TON of money over the years. Mr. Midlife was born to eat leftovers, so he is all about the homemade lunches. The only trick for this to work is to consistently make more food than you need for dinner. Pasta dishes, casseroles and extra grilled meat are great ways to stretch the leftovers. Thanks for a well thought out list!

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