Lately, I’m not sure what’s going on with my money. Ever since getting back from three months of travel, I just haven’t felt like I have the time to sit down and see what’s going on.
This isn’t a healthy state of financial affairs.
I need to get real about my finances again.
Are your finances in shambles?
The first step to getting real with your finances is figuring out if they are in shambles. While my financial situation isn’t dire, I’m not exactly on top of money like I usually am.
You need to be brutally honest about where you are with your finances. In my case, the fact that my bills are largely paid automatically means that I don’t have a huge issue with missing payments.
However, I haven’t been tracking my spending like I usually do. Instead, I’m just sort of moving money around when I think I need to spend more. It’s a different approach than usual, and there are days that I feel like maybe I’m blowing through my monthly income faster than I should be.
If you’re keeping is real with your finances, you need to acknowledge your shortcomings. Have you been missing bill payments? Are you uncomfortable with your debt level? Do you spend without thinking about your purchases?
Look at your money situation and honestly acknowledge where you are. You can’t improve moving forward if you don’t know where you’re starting.
Evaluate your money goals.
Now that the new year approaches, it’s common to talk about setting goals. It’s an annual theme. And that includes goals about money. Once you know where you stand, you probably want to set goals that help you fix your financial problems or help you improve the situation for the future.
As you get real with your finances, it’s important to evaluate whether or not your goals make sense — and are realistic.
If you have a bunch of debt, it might not be practical to expect to pay it off in a few months. Maybe you can’t immediately max out your retirement account. There’s nothing wrong with this. Instead, the important thing is to make progress. Take a look at where you stand, where you want to be, and a realistic timeframe.
I know that I need to reconcile all my accounts for the last three months. I also need to review my own financial priorities and make adjustments since my new job. It’s a huge undertaking. I either need to suck it up and take a whole day to make it happen or I need to carve out smaller chunks of time over the course of a week.
Either way, I need to get real about my finances and about getting back on track.
Are you honest with your partner?
Let’s not forget that you need to keep it real with your finances when it comes to your life partner. In recent years, there are have been stories about financial infidelity, and the serious problems it causes over time.
No, this doesn’t mean that you need to combine your finances. In fact, I probably won’t combine finances with someone else again. However, I still need to be honest about my finances if I get with a potential partner.
I have a friend who keeps her finances separate from her husband’s. They don’t get into each other’s business. But they do generally keep each other updated about potential issues. You need to be honest about anything that could affect your relationship or the joint portions of your finances.
This might mean fessing up about your debt or admitting to your crappy credit score. It’s not the end of the world. But if you decide you want to buy a home together or if your debt could potentially put strain on your household finances, you need to be real about that.
It’s not easy, but it needs to be done.
When to keep your finances to yourself.
Keeping it real with your finances doesn’t mean that you go around telling everyone your money business. If you’re cool with that, there’s no shame in that game. However, don’t feel like you need to be completely transparent all the time.
I’m not someone who shares income reports. I don’t give exact numbers related to my student loan debt; I just say that I have it and don’t plan on paying it off early.
Even when you’re in a relationship you don’t need to share everything about your finances. I already know that I’m not telling someone about everything in my money life. I stay on top of my bills. I can afford what I spend my money on. I don’t have major issues that will sabotage any joint financial effort.
And that’s all anyone needs to know.
My parents don’t need to know exactly what I make. My friends don’t need to know my exact credit score. It just isn’t necessary.
There’s no reason to brag about your money, but you also don’t need to be ashamed to talk about some of your deals or address important issues.
As long as you own your financial situation to yourself and move forward to do what’s right with your money, you should be fine.