1. Make a Budget

The first step to sorting out your finances is to sit down and figure out how much money you bring in each month, what bills you need to pay with that money and when those bills are due. Make a list on a piece of paper, one column on the left for money you bring in, and on the right, a column with bills and due dates. Then start matching up your incoming funds with outgoing money… soon you’ll see which bills you need to pay with which paychecks, and how much you’ll have left over for “other” things, like dining out, new shoes, savings, and the like.

2. Adjust as Necessary

Once you’ve started living on your budget, you’ll see that there are a lot more (or sometimes less) expenses than you thought, so as you go along, feel free to adjust. For instance, if you wrote down that you spend $100 a week on groceries, and it’s really more like $50, adjust your budget and set that extra $50 into savings instead.

3. Stop Using Credit Cards!

It’s truly this simple: credit cards companies don’t want you to stop using their cards because if you ever pay them off or stop using them, they stop taking your money! They collect billions of dollars every year in fees alone… that doesn’t even include interest! So stop giving them your money! Stop using your credit cards… right now!

4. Pay off Debt, High Interest First

Once you’ve stopped using your charge cards, the next step to sorting out your finances is to figure out which of your debts has the highest interest, and start paying that down right away. One you’ve paid off a credit card or loan, close the account. Save one or two accounts or cards with low interest and no annual fees for emergencies, and to keep your credit score healthy, but no matter what the others offer to get you to stay, close the accounts and cut up the cards!

5. Have a Back-up Plan

If you lost your job right now, today, how long could you pay your bills and meet your obligations before you found another job? Experts suggest having a six-month or at least a three-month salary squirreled away in case of a job loss or illness that makes it impossible to work. If you don’t have this cushion yet, start saving… and don’t spend it! Trust me, it’s much better in this case to be safe (or saved!) than sorry.

6. Start Saving, Even a Little

Once you have your back-up plan savings in place, start saving for something else… call it a rainy day fund for emergencies like unexpected car troubles or a pair of Jimmy Choos you just can’t resist. This is your savings for things you didn’t expect to have to pay for…

7. Think about Retirement

Last but not least, it’s important to think about how you’ll live when you’re retried… and it’s never too soon to start setting money aside. If you’re working full-time, your employer may offer a 401(k) or other retirement savings plan. If they do, take advantage of it! Even if you’re only setting aside a tiny amount each pay period, it’s a start… and if your employer matches any of the money you save, bonus!

None of these steps are really difficult, they just take a little sacrifice and a lot of willpower. Make sure to put a little wiggle room in your budget for new shoes, right? I’ve started by making a budget, and into month 3, I’m seeing an overall difference! Which of these ways will you use to sort out your finances? Or do you have any other financial wellness tips to share?

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