Earlier this week, I gave a class on the steps required, in order, to take control of your finances and get you to a place where you have freedom and choice.
At the end of the presentation, I did a bit of coaching for participants who wanted some guidance with their situation.
The first question that landed was such a good one. Here’s what the participant said, paraphrased:
I’ve just separated and everything feels out of control for me. What should I do? I have a pretty good, big picture idea of where my money is going, but I don’t know what I should do next. What do you suggest?
You know what’s great about this question? It applies to a lot of women, not just the newly separated crowd.
One of the most common comments I get when speaking with women about their finances is, “I don’t feel in control.”
That’s stressful at the best of times, but when you’re suddenly flying solo, it can be downright terrifying.
Thankfully, the process involved in getting back into control is a simple one. It’s not always easy to implement, but it is straight forward.
Today, I’ll share 3 tips to put you back in the driver’s seat of your money.
This will give you more peace of mind, especially if your life feels like a thousand-piece puzzle that’s just been tossed into the air, leaving you with a disorganized mess of stray parts everywhere and no idea where to start. 🧩
Take a deep breath, carve out some quiet time, and let’s get you back on track.
You can’t fix what you don’t track
The very first step is to track the flow of money in and out of your life.
There is no way you can make smart decisions about how to use your money if you don’t know where it’s going and how you’re using it in the first place.
Tracking your money is essential.
You can use an app like Mint, create your own spreadsheet (if you’ve taken my Take Charge of Your Money course or you’re a member of my Women’s Financial Freedom Group, you have access to my custom-made spreadsheet), or track it by hand.
It doesn’t matter how you do it, just that you do.
Here’s the thing, though: it’s not enough to have a rough idea of how much you spend in each major category.
You need enough detail to be able to make decisions about what to keep, amend, or eliminate.
The only way to get that level of detail is to get your hands on your spending by getting receipts for everything, checking them against your credit card and bank statements, then analyzing your spending.
What do I mean by analyzing your spending? I mean shining a light on all those categories to see how many dollars are being spent in each.
How much does your car actually cost you?
How much are you spending on food – the stuff you prepare at home?
What’s the total of all those Friday night outings with your BFFs?
What about clothes for your kids? How much does that amount to?
You get the idea.
Then do the same for your income.
💰 How much do you technically earn? I say “technically”, because that’s not the amount that lands in your chequing account. I’m referring to your salary of $X per year or your gross income if you’re self-employed.
💰 What is your net pay? That’s the amount that is deposited into your account by your employer; it’s what’s left after the various deductions.
If you’re self-employed, this is the amount you get to keep after all the business expenses and costs.
Now that you have the details on the input (i.e. your income) and the output (i.e. your expenses), it’s time to move on to the next step.
What are your decision-making criteria?
Once you’ve got a handle on how much you’re spending on the major categories – which in my world are Essentials, Priorities, and Other – how do you decide if your money is serving you well?
❓Do you base it on what others say is sensible (i.e. spend less on restaurant meals)?
❓Do you take a wild a** guess? (“I should probably cut out my yoga membership.”)
If you don’t have criteria in place to make decisions about how to use your money, you’re essentially budgeting blind. You may not end up in a bad place with this approach, but I personally wouldn’t bet the farm on it.
What I can say about that making financial decisions in the absence of clear guiding principles is that it will not serve you well in the long run.
The only way to ensure that money serves your highest, best interests is to figure out your core values, then use those values to create goals.
Once you have values-based goals in place, you are equipped with a map for your money.
❓Should you cut out your yoga membership?
Not if doing yoga is in line with your core values and serves your values-based goals.
❓Should you take on a $20,000 bathroom reno?
Not if it means taking on more corrosive debt and being financially strong is one of your top values.
❓Should you buy a new car?
Yes, if it makes sense for your family in the long run. But you might decide to hold off for a bit. You need a few more months to save up so that you don’t have to go into debt for it, because financial independence is one of your top values.
See how powerful knowing your core values is?
Figuring out your core values is Job #1 after you’ve started tracking your dollars.
Before you wave me off and say, “Yeah, yeah, no worries, I know my values!” ask yourself this:
Are my values specific enough and prioritized to enable me to make nuanced, sophisticated financial decisions?
That’s what we’re aiming for here: a North Star for your money.
The biggest win of all
OK, you have to admit that feeling like a money management goddess is pretty awesome. It’s a compelling reason to do the work mentioned above.
But the biggest win of all is that creating and maintaining a money system that is tied to your core values flips the usual script when it comes to your relationship with money.
Instead of you working for money all the time, you now turn money into your employee.
Isn’t it time to make your money serve you a whole lot better?
Separating or divorcing?
If your relationship has ended and you’re headed into the world of solo money management, take a deep breath and remember that you can do this. You can do hard things.
You’re going to be fine.
I’ve worked with a lot of women who have suddenly found themselves dealing with all the financial things, and while it’s stressful and overwhelming at moments, it’s also an opportunity for you to step into your power.
The more you learn, the more you empower yourself. 💪
The more hands-on you become with your finances, the more you will feel in control and the more your confidence will grow.
Start by tracking your money and figuring out what matters most to you – your core values. Follow the steps I outlined above.
This is an opportunity for you to reacquaint yourself with parts of you that may have been buried for a while.
Remind yourself that it’s time to stop staring at the closed door and start looking for the open window.
Give yourself time and grace to figure it out and to work through the hard bits.
Take it one small step at a time. You’ll get there.
If you need a guiding hand or a cheerleader, reach out. I’m here for you.
Photo by Jenny Ueberberg on Unsplash
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