Clearly, this is easier said than done. It’s one thing for me to sit at my desk and type out pithy advice; it’s another to actually deal with the situation day-to-day in real life. But here’s the thing: In order to get where I am, I had to start where I was.
When I say “start where you are”, I mean that you should accept that who you are and what you have today is, essentially, your starting hand. Don’t beat yourself up for past mistakes. Don’t blame others for getting you into this situation. These are the cards you’ve been dealt (even if you’ve dealt them to yourself), and it’s now up to you to play them as best you can.
How Do You Do This?
1. Take Care of Yourself
First and foremost, take care of yourself. Pause. Breathe. Prioritize your physical and mental health, even if that means spending a bit of time and money. Exercise. Eat right. Money spent on self-care is never wasted.
2. Take Stock of Your Situation
Figure out exactly where you are starting from. Set aside a Saturday morning to perform a “financial inventory”. Ideally, you’d take the time to begin tracking your money with a program like Quicken or YNAB or Personal Capital. At the very least, calculate your net worth and list all of your debts, bills, assets, and income. You need a snapshot of your current financial situation so you know what you’re working with.
3. Figure Out Where You Want to Go.
It’s great to decide that you want to change, that you want to improve your financial life, for instance. But you’ll have greater success if your reason for the change is specific, not nebulous. Craft a personal mission statement, and maybe use this to set up a series of smart goals to act as waypoints along the road to your destination.
4. Restructure Your Life
We all suffer from “financial drift”. We become complacent and lose sight of our larger goals from time to time. When you press the reset button, when you start your financial journey, it’s the perfect time to make changes, large and small. Analyze all of your spendings. Cut the crap you do not need. Consider changing jobs. Ask yourself if it might make sense to move to a cheaper home — or to a cheaper city or state.
5. Don’t Compare Yourself to Others
Not even in the abstract. On an individual level, comparing yourself to your friends and family is a bad idea because you’re pitting your internal worst against their external best. Of course, that’ll make you feel like crap! Besides, it doesn’t matter where anybody else is; what matters is where you are relative to where you want to be. It’s also a bad idea to compare yourself to statistical norms. Sure, stats can be fun to look at — and I share them all the time here at GRS — but stats are soul-less, lifeless abstract numbers. Statistics don’t have cancer. Statistics don’t get divorces. Statistics don’t struggle with faulty financial blueprints. When you start where you are, worry about your own self — not anybody else.
6. Keep Things Simple
I know first-hand just how tempting it can be to over-complicate things when you want to make a change. I’m a master at this. But the thing is, when you make things too complex, you’re less likely to follow through on them. If your fitness program is “I’m going to walk around the block each day”, you’ll have a better shot at success than if you decide “I’ll bike for all of my errands”. One is simple and the other is not. This advice is especially true with money. Keep things simple at the start; you can always add complexity later.
7. Seek Support
One of the best things you can do when starting out is to find support for the journey ahead. This support can take many forms. You might find a mentor, for instance, somebody who’s been down the same path before you. Pick their brain. Find out what worked for them and what didn’t. You might put together a “personal board of directors”, trusted experts who can give you solid financial advice. Most of all, look for other people in a similar position to you. Band together so that you can start your journeys together.
I’d also add that when you’re making changes, you shouldn’t expect to get things right immediately. There’s a lot of trial and error. You’ll make mistakes. You’ll try certain methods that don’t quite work, then switch to others. That’s okay. Don’t get trapped by the need to make a perfect choice when starting out. It’s enough to make a good choice in the beginning. There’ll be time for perfection later.
There’s a lot more to getting out of debt, managing your money, and saving for retirement, obviously. But these are the essential steps to getting started. You don’t start where your friends or co-workers started. You don’t start where you wish you were. You start where you are.
Article Credit: https://www.getrichslowly.org/start-where-you-are/