Are you confused about what to do with your finances? Have you pretty much thrown in the towel because it just doesn’t seem worth the time or energy to try to figure it out?
Dealing with finances can be difficult and often gets pushed to the back burner. Beyond making sure we live within our means, what kind of financial goals should we even be working toward? What are the steps we need to follow for a good plan to financial success?
Of course, the most common financial goal is probably retirement, but what else? As a Christian, I’m called to use my money according to God’s word, for a purpose. We first have to take care of ourselves and our family. But beyond that, what should we really be doing with our money?
I’ve decided to simplify it for you—and for myself! Here is a list of 12 steps that we can go through in order. If you’ve already taken care of the first item, continue on to the next and the next until you get to a money issue you haven’t personally addressed yet. You will then know exactly where you should start and what you should be doing in order to best steward your money.
Your Steps To Obtain Financial Success
Your Steps To Obtain Financial Success1) Know how much income you (or your family) make and bring home
2) Be aware of exactly how much you’re spending
3) Know the difference between items 1 & 2–are you living within your means?
4) What needs to change in order to live within your means? What expenses can you cut or reduce? Is there anything you can do to increase your income?
***Need a detailed look at your expenses and your income and really ready to dig into your finances?? Take the Penny Steward Mama Budget Challenge to get a step-by step guide!
If you are already living within your means, continue on and decide what you can do to be more purposeful with your money.
5) Give regularly and purposefully to your church and/or charity.
6) Save a large sum of money as a “cushion” in a separate place (like a savings account) from your everyday checking account. This could be called an emergency fund or safety net or whatever. It needs to be there so you don’t have to resort to a credit card or loan to take care of the unexpected. Decide on the amount. Most money experts recommend anywhere from 3 to 9 months of expenses. You can decide what makes the most sense based on your situation. If you need help deciding on that number, definitely reach out to me 🙂
7) Contribute regularly to retirement. If your company offers a 401(k) with a match, be sure to take advantage of that free money! If not, a Roth IRA will grow tax-free and leave you with a big chunk of tax-free money later in life! Of course, you could always decide to do both! 😉
8) Work actively and intensely to reduce your consumer debt and/or student loans. If you are highly motivated to do this right now, stop retirement contributions for a short time to make more headway on your debt. Once you are debt-free, you can go back to Step 7 and ramp up those retirement contributions even more. 
9) Contribute regularly to a college fund (for your kids or even you or a spouse). If this is not relevant to your situation, you get to skip it!
10) Contribute to a different future financial target or goal (a vacation, new home, improvement to your current home, non-retirement investment, etc.) This is where you truly get to decide the things most important to you and let your money work for YOU!
11) Pay off your home early!
12) Give even more to charity, church, and/or an organization you wholeheartedly believe in, and continue to focus on whatever money priority is #1 for YOU!
What financial success step are you on currently?
Personally, since we just bought a new home, we are back at Step 3 making sure we are still living within our means even with bigger monthly bills. Since the twins were born (3 years ago), we dropped down to one income, and our budget has been much tighter than I would like.
Now Erick is going back to work, so our goal is to be able to start working toward some of these things we have put off for awhile. After a couple more months of adjusting our budget, we should get to return to working on college funding, future vacation goals and home improvements, and paying off the home early.
Which action step are you at currently? What can you do to get past that one and start working on the next?
Write down the step to financial success you are currently working on.
Decide on the next milestone you want to achieve depending on which action step you are currently in. For example, if you’re working on Step 6, your “money cushion” for emergencies, it could be saving $10, or $50, or whatever. Then, you must do that over and over to save up to your final number! You MUST write down your milestone, or goal and keep it at the forefront of your eyes and mind!
It’s always fun to create your motivation!
Even draw a picture or consider doing something creative that will help keep you motivated to reach that next milestone. (Or, again get the fun Penny Steward Mama Jar Savings Tracker that will keep you motivated with your goals here!)
Here’s what I created when we were working on paying down the mortgage of our old house. It’s the layout of our home, and I got to color in more squares the more we paid toward it. 🙂
Whichever season of life you are in right now, don’t give up hope!
Just do what you can in the current stage you’re in and be intentional about it. Again, go through each step and carefully evaluate your current money situation.
Whether you are just starting at step 1 or if you are somewhere in the middle, you will make progress over time if you keep that intentional mindset. Every teeny tiny baby step is progress!! Keep stepping 😉
Once you decide on your next step to financial success, share with us on Facebook in the Penny Steward Mama Accountability Group! Or you can email me at pennystewardmama@gmail.com. Either way, I want to know how you’re doing so I can celebrate with you and help keep you encouraged!
As always, steward intentionally!
Heather
Thank you for your succinct post on finances! My youngest daughter is heading into her own apartment after living at home for a few years and working full time so she has a lot more savings than average 25 year old and no debts! Any resources I could steer her to as a single woman with not much financial ability?
Hi Jill! It sounds like your daughter has a great start with her finances at such a young age! Debt-free, savings, and a full-time job! Go her!! I’m not sure what you mean by “not much financial ability.” Do you mean she doesn’t make much money and now that she is on her own it will be a little tight? Either way, I would definitely recommend waiting a few months before changing anything so she can get used to her new budget with apartment rent and expenses that she may not be used to paying. I’m not sure if you have heard of Dave Ramsey, but Rachel Cruze is his daughter and she puts out some amazing videos and resources specifically geared toward young women. She would be a good one to start with regarding learning the basics of money management! And, of course, you can always direct her to my blog and our Facebook community 😉
Wow, thanks so much for putting this step by step together. Sometimes its so hard to know exactly where to start. I have never been good at budgeting and this plan is super easy to follow. I am currently in step number 2, know what I’m spending on. I got last months expenses down and hope to be more intentional with my dollars this month. 🙂
Yay for getting last month’s expenses down! Way to go! That is a huge win! And super proud of you for planning to be intentional with your money 🙂 Can’t wait to see where you are a few months from now!
Thank you for sharing these 12 great steps! Planning for the future is hard and I wish I had done a better job of it. These steps would have been great to start early on. Dayna xx
Great post!! I love the idea for paying off the house. I get frustrated because there are unexpected expenses every month. It throws us off a lot. What do you do about this? Have a buffer fund?
Thanks for sharing a great message!!
Hi Susan! Thanks for the comment! Yes, those unexpected expenses can definitely be tough! The first thing to do is to realize that you will have them and keep an emergency fund for those that are true emergencies. Now, think about the unexpected expenses that you have had over the last few months. Could any of them be somewhat predicted? As an example, a car repair or home repair may have come up. We actually have some sinking funds for things like that that are bound to come up at some point. We fund a small amount to them monthly, and by the time something happens, we usually have enough in that fund to cover it–or we have to dip into the emergency fund. The other thing would be to try to take care of the expense as cost-effective as possible. For car repairs, we have found a good local mechanic that charges way less than what the dealership would charge! So it definitely depends on the expense, but do your best to keep it cheap and to plan ahead when possible! Feel free to message me or email me at pennystewardmama.com if you have any specific questions! I would love to dive into anything deeper with you! Again, thanks for the comment!