The First Step to Get Your Finances Sorted

Many of us begin this year determined to do something about our finances. We promise ourselves that this year it will be different like we will change our attitude, learn new things and develop better habits about our money. But it can all seem overwhelming. It's hard to know where to start, feeling like this often means we just don't start at all.

One good idea is to split up the different aspects of your personal finances and address them one by one, month by month. See if you can make this year you finally get your finances sorted.

This annual plan can then be repeated each year. It gets easier as you learn more about your money and become more skilled. And the better shape your finances are in the more motivated you become to do even better. Let's start.

What do you really want?
All big changes start in our minds. Very often the reason that we have neglected our finances is that we have never really thought about all of the issues in a focused way. Most of us only think about money when we don't have enough to pay our bills.

It's also very common to think about money in a short-term way, what we have this week or fortnight or month and what we are able to do with the money that comes in this pay period. It's very hard to change how you think about your money or how you plan your finances without thinking about the bigger picture. It's not too late to just start by now of this year. So what should you think about? I think you should dream a little.

Imagine you are living the ideal life.
What would you be?
What would you be doing?
Who would you be with?
How would you spend your time?
What would a typical day be like?
What would you have in your life?

Some people like to think alone. Others find it helpful to talk with a friend. You could write about your dreams; draw them with big crayons; build a collage; set them to music; write a poem.

Why is it important to dream?
Because money is only a tool to get the things in life that are important to you, if you don't know what really matters you will not know what changes to make to your use of money. We all deserve to have wonderful lives, but many of us don't get to have any of what we want because we never get out finances sorted.

When you are clear about what matters to you it is much easier to find the motivation to do what needs to be done. Doing the dreaming exercise helps us answer the "why" question about our money, why should I bother to change? If you know what you really want, and if you want it enough, it becomes much easier to do the other things to get your finances sorted.