A Grown Up’s Guide to Getting Your Financial House in Order

By Erica Root

Erica Root
Erica Root

I want to retire one day. In a fantasy world, I would save up wisely and retire early, giving me the time and financial freedom to read and travel as much as I like.

To make this even a remote possibility I need to have a better understanding of what I am saving, not just in my regular bank account, but beyond.

I needed to conduct my own financial audit.

  • What am I spending money on?
  • How much longer do I have until I pay off my student loans?
  • What’s my login for my 401(k) plan at my previous job?

All questions I should have the answers to, but don’t.

I consider myself an organized person, but for some reason, financial organization has never been my strong suit.

Time to change that.

With big life events happening in the last twelve months, getting a new job, buying my first home, and getting paid as a consultant for the first time, my life has seen many changes. And now that I am thirty, I really felt the pressure to embrace adulthood.

Below is my plan for getting my financial house in order:

  • Get a tax wom/man. It’s time. Everyone keeps saying how good the tax benefits are for homeowners. I can’t wait to feel those benefits, especially as I continue to adjust to paying a mortgage versus paying rent. I also want to make sure I am taking the correct number of deductions. Bottom line: I don’t want any surprises come April 15.
  • Recover my 401(k) username and password. I have two 401(k) accounts. One with my current employer and one with my former. I never got around to consolidating them, and now that I am in the midst of my personal financial audit I need to get that information to move one 401(k) into the other. Or at the very least so that I can check in on my investment. Another thing on my personal to-do list: figure out a good, safe way to keep my usernames and passwords handy.    
  • Figure out when my student loans will be paid off. I know I am doing a few things right when it comes to my student loans. I am paying them off ahead of schedule, sending in an extra hundred dollars every month. Technically, I don’t have to pay them for two years, but I avoid that because then I would have to pay more taxes. I really only take a good look at my student loan documents in February or March, when I get my interest statement in the mail. And of course to make sure that the requisite funds are taken out of my bank account each month. Beyond that, nothing.
  • Record my spending. There are a lot of great ways to track what you spend, Mint.com being a prime example. What I plan to do however is a tad more manual. With my handy dandy planner, I will write down all my expenditures. I attempted to do this earlier in the year, but it didn’t last. I know some people like to carry cash and only use that to buy their coffees, clothes and groceries. While I think it is a good idea, I like the idea of accumulating points on my Bank of America Travel Rewards credit card even more. By writing everything down in my planner, I will be forced to visualize my spending. This can help me detect habits that I might want to break – like my daily coffee run, and serve as a record for my spending and help me recognize fraudulent charges.
  • Log into my bank account once a week. Again, this is a matter of just being more informed about my money. To make sure I’m not accidentally charged twice at the gas station, that my auto loan payment was successfully paid. Simply carving out the time to really review, and frankly understand, where I am financially. When it comes to finances, it might seem easier to sweep things under the rug or ignore, but this is not a sustainable or healthy long term strategy.  

I’m looking forward to implementing these simple, but necessary changes. I think they will give me some peace of mind and empower me to make more informed financial decisions in the future. While there are a few things I need to change, there are definitely a few things I am doing right:

  • I Pay myself. Automatically. Every Month. For at least three years I have auto-transferred money from my checking account to my savings. It’s not a ton of money, but it is money that I never really think about, and one that allows me to slowly build a reserve.
  • Pay off my credit card at the end of every month. I realize some people might not have this luxury or financial stability, but it is something to aspire to. For years, my credit card collected dust in my wallet. I didn’t want to use it, it seemed irresponsible to do so, something that should only come out in emergencies or when renting a car. My views on this slowly changed as I learned about the importance of building my credit. Now I use my card everywhere, even abroad. I use it to make purchases I would have previously made on my debit card, but now I am accumulating cash rewards or travel rewards depending on the card I use. At the end of each month, I pay it off and start again.

When was the last time YOU took a close look at your finances? Performed a personal audit?

It’s never too late – or too early to dig a little deeper, to get a firmer grasp on what you are spending, the level of your personal debt and doing everything you can to save for retirement.


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