The new year is the perfect time to get honest about your finances, but it can be hard. Sitting down and seeing how you spend your money — especially after the notoriously expensive holiday season —can cause financial stress in and of itself.
According to financial behavior expert Stacey Tisdale, this is the main reason people ignore the hard truths about their finances.
"There is a lot of stress around managing your finances, but by ignoring your finances, you make it impossible to reach your financial goals," she says. "I have had clients that started with small amounts of debt that ballooned into larger and larger debts because they ignored the interest rates, the payments, and how fast the debt was growing because they felt overwhelmed and chose to ignore it."
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Whatever is causing you stress about money, whether it is an overdue car note, medical bill, or credit card debt, you cannot fix it until you face it.
Here are three steps you can take to stop ignoring your finances and get your money back on track:
1. Use a budgeting app
"If you feel like you never know where your money is going, a budgeting app will show you and can assist you with getting a handle on your spending," Tisdale says.
A budgeting app is also a way to start small and build as you go with your finances. "The first step is getting started, and don't put it off. A budgeting app starts you on the journey of getting on top of your finances. It will not happen overnight, but you will be on your way," Tisdale added.
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2. Seek out professional help if you need to
Not knowing where to start is often a major roadblock in getting back on track with money. Tisdale recommends turning to a financial advisor in this situation.
A financial advisor can help you reach your money goals, whether that means saving for retirement, building an emergency fund, or creating a budget. There are many ways to find a financial advisor, but asking friends, family, and colleagues is a good place to start. Also, be sure to check out their credentials and fee structure before signing anything.
3. Understand that money is only a tool
"If you have made mistakes with money, it is not the end of the world," Tisdale told Personal Finance Insider. "It might cause you temporary financial strain, but you can recover."
"Your money and any issues that you may be having do not define you. You can start over now. Sit down and understand all of your bills, and pay everything on time. Build your financial competence over time, and understand that financial stability is a journey and not a race."
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Keeping these three things in mind can help you adjust your mindset and start saving and paying off debt a few dollars at a time.
Senior Personal Finance Reporter and Spokesperson
Jennifer Streaks is a Personal Finance Expert and Journalist who writes about credit and all things money for Business Insider. Committed to financial literacy and economic empowerment, she has covered financial topics for over a decade, writing about her own experiences and sharing her expertise to give consumers actionable financial advice.Along with exploring credit scores, credit reports, and how to build credit, Jennifer analyzes how current economic trends impact everyday people and offers her expert advice on budgeting, saving, and growing wealth in today’s economy. She regularly appears as an on-air financial commentator on programs like Good Morning America, Yahoo! Finance, CBS, and MSNBC.ExperienceBefore joining Business Insider, Jennifer was a financial contributor for CNBC and covered personal finance, entrepreneurship, tech, and the economy for Forbes. Her work has appeared in TheGrio, Black Enterprise, and USA Today.Jennifer is also the author of "Thrive! ... Affordably: Your Month-to-Month Guide to Living Your Best Life Without Breaking the Bank." The book offers advice, tips, and financial management lessons geared toward helping the reader highlight strengths, identify missteps, and take control of their finances.Jennifer’s most important financial advice to her friends is to always have an emergency fund.ExpertiseJennifer’s expertise includes:
- Credit scores
- Credit history
- Credit reports
- Budgeting
- Saving
- Housing
- Retirement
- The economy
- Financial trends
EducationJennifer earned an MBA from The Johns Hopkins University Carey School of Business and completed the Wharton Seminar for Business Journalists.Jennifer is based in New York City.
