I was on the phone with a friend the other day when she told me about her plan to get her finances in order. The first thing she wanted to do was figure out what was going on with some retirement plans from two previous jobs. “I called the people on the statement and they got me so confused, that I just stopped trying.” And with that, the financial resolution ended. Sound familiar?
We’ve all experienced it – a momentary flash of inspiration to get something done, only to lose steam quickly thereafter. The task starts to seem too daunting, there are too many hoops to jump through, and the inertia to create change comes to a crashing halt. This is particularly true of financial matters, which often have many steps (steps that we are never really taught to tackle), and a lot of uncertainty.
But a little bit of legwork can make all the difference and be incredibly worthwhile in the long run. Here are some tips for addressing that nagging financial voice in the back of your head:
- Identify the problem (and envision the solution): What is keeping you up at night? How would it feel if this problem went away? Just knowing what you are trying to do is the big first step, even if the problem is as vague as, “figuring out why I am getting statements from three different companies that I didn’t know I had accounts with.”
- Gather data: What tools might you need to solve this problem? Depending on what your goal is, gathering updated statements, recent financial records, or the last few months of bank transactions might be a good first step. If you need to get a better handle on the budget, what might help you see where your money is going?
- Do one thing at a time: Now that you have an idea of your destination, you can focus your attention on the smaller steps. Rather than becoming overwhelmed by everything between here and the end goal, start tackling one task at a time. Envision small, manageable pieces that will take you one step closer. For example, once you’ve tracked down statements for those rogue 401(k)’s, your next step might be opening a new account. Once that is done, you would move on to transferring funds, and finally, picking investments.
- Get help: Some problems may need professional guidance. If you are truly feeling overwhelmed, reach out to someone who can help you make sense of it all, whether it’s a financial advisor, estate attorney, or even a trusted friend who is “good with numbers.” Feeling like you aren’t going at it alone can lift a huge weight.
We all have areas that we procrastinate and ignore, but tackling your money problems sooner rather than later can save you a ton of mental anxiety – not to mention thousands of dollars over the long run.
