Stop Being Afraid of Money And Learn How to Fix Your Finances

Dark blue diamond with the word Financial in the middle

Are you afraid of money?

Afraid of spending it or afraid of saving it? Does the word budget make you break out in a cold sweat?  Does paying your bills make you want to stick your fingers in your ears and sing na na na na?  If you identify with any of the above statements, there is no judgement here.  Let’s just roll up our sleeves, put our “adulting” pants on and figure out how to fix your finances!

This is the sixth post in my series, Life is a Puzzle. Each post focuses on a “corner” of life’s puzzle.  The earlier posts have covered the physical, mental, emotional, social and spiritual corners.  The idea is that when life is especially nuts, it can help to focus on one corner of the puzzle at a time.  That way, just like with a 1,000,000 piece puzzle, you can slowly, but surely put the pieces together.  This post covers the financial corner and its four pillars and eight steps. 

Financial Health is “a composite measure of an individual’s financial life… it assesses whether they are spending, saving, borrowing and planning in ways that will enable them to be resilient” and give them the freedom “to pursue opportunities.”

(Financial Health Network, n.d.)

Building your financial “house” is something that we all have to do. 

As I said, it’s an important part of “adulting”. You have to make money, you have to spend money, and if you’re smart, you’ll invest and plan for your future, as well as the future of your loved ones. 

The four Pillars of how to fix your finances are spending, saving, borrowing and planning.

According to the Financial Health Network, the four Pillars of financial health are: spending, saving, borrowing, and planning.  Spending is made up of your income and bills.  Hopefully, your income is more than the total of your bills and you are able to pay all your bills on time.  Saving includes both short term and long term savings and investment. 

 Borrowing refers to your amount of total debt and your credit score.  Finally planning is all about insurance and end of life.  (Financial Health Network, n.d.)

Before we get into the eight steps to achieving all this wonderfulness, let’s take a moment to measure our financial health. 

For many people, this is the scariest part.  The fear of judgment is real. The fear that even if you’ve been “Doing your best” it might still not be good enough, is real.  Money is perhaps one of the easiest ways to compare yourself to others.  Who makes more? Who has a bigger bank account?  Banks and businesses play into this when they want to see your credit score before they’ll do business with you.  Is it “good enough?”  If not, how much extra will you have to pay?  Will you even be able to pursue your dream car? House? Job? If you don’t have good credit?  Literally so much of life rides on our ability to manage money.   If you’ve made financial mistakes in the past, how to your fix your finances?

Do you even need to fix your finances?

It makes sense if you’re scared to take a cold hard look at your own financial picture.  However, like many things in life, and like all problems, you can’t start to figure out the solution until you really understand the problem.  That means pulling out all the statements and looking at your real financial position.  Take all the judgment, all the garbage that your parents and caregivers taught you and put it in a mental box for the time being.  It belongs in the mental/emotional corner.  Finances are just bean counting.  Take that big breath in and let’s figure out where we stand.  If big emotions come up (and they absolutely do for almost all of us), jot it down in your journal, or take a moment to step away and let them calm down.  We’re not here to make more problems, we’re here to start fixing them. 

Here are the questions that you need to answer as honestly and completely as you can. 

Again, no judgement, this is just for you to see and know. 


  • How prepared are you for unexpected events? This can be anything from a medical bill, to car breakdown, to sudden marriage proposal, to a job change.  Can you most likely handle the financial side of something that requires a financial solution?
  • Do you have an emergency fund? Is it big enough to absorb any or all of the above? Can you access it quickly? (Such as with an online bank transfer?)
  • What is your net worth? You can use an online calculation to figure it out.  Basically, you take all your “assets”, your bank accounts, investments, real estate, cash under your mattress, and add it all up.  Then you take your debts, car, house, credit cards, student loans, anyone and everyone that you owe money to (liabilities), ignore your salary, and monthly bills here.  Take the total of all the assets and subtract the total of all the liabilities.  Now you have your net worth.  If your assets exceed your liabilities, then you have positive net worth.  If your liabilities exceed your assets, then you have negative net worth.  Don’t fret.  Negative net worth is very common, especially if you are just starting out in life.  The goal is to get to a positive net worth sooner rather than later. 


  • Do you have the things that you NEED in life?  Food, shelter, clothing?
  • Do you have the things that you WANT? Not just a car, but rather the car you WANT to drive.  Not just an apartment or house, rather, the place where you WANT to live, decorated and maintained the way you WANT to.  Not just the clothes you need to cover your nakedness, rather, the style and fit that you prefer.  Can you afford the vacation that you want to go on?  Can you afford your hobbies?


  •  What percentage of your debt is high interest? (Credit Card) Typically, mortgages and student loans are lower interest than credit cards.  Your car loan might be either, it depends on your credit score.  Or you might own your car outright, in which case it is an asset, rather than a liability.


  • Are you actively saving for retirement?  Are you on track to meet your goals?
  • Do you have enough insurance?  This is asking about Health insurance, car insurance, life insurance and business insurance, if you own a business, side hustle or gig.
    • (Kagen, 2022)

Ok, so, you still with me?  How did it go?  It bears repeating, there is no judgement here.  The answers to those questions are for your eyes only. 

Your “How to fix your finances report card”

Now that you have a report card, if you will, about your financial picture, you can decide where you need to learn how to fix your finances.  There are lots, and I mean LOTS of places you can go if you want more information, or if you feel like you need a coach.  (Here are some popular ones from Amazon. These are affiliate links and I may earn a small commission if you purchase from them. Thanks!) And please, please, please don’t discount the emotional side of this.  So many of our attitudes and habits around money are picked up from our families of origin.  You may need to talk things through with a good therapist before you can really get your financial house in order. 

From here, you can use the questions above to guide you.  Pick where you think you need to improve and see what you need to learn to fix your finances. 

If you want a little more detail, keep reading.

How to fix your finances

Step 1: Goal Setting

If you prefer a step by step approach to improving your financial picture, let’s start with your answers from above.  From there, what are your goals? This is the brainstorming and dreaming phase, so there are no “wrong” answers.  Want $10,000,000 in the bank?  Do you want to retire to Bora Bora? Do you want to pay off your credit cards and buy a big house with cash, no mortgage?  Write it all down.  Do you just want to be able to get Starbucks or Dunkin’ once a week?  Do you want to drive a Maserati? Shop on 5th Avenue in New York City? Take your grandkids to Disney World? Write down all your goals, big, little and in-between.  Write down your goals for next week, next month, 10 year, 50 years.  This is the first step in learning how to fix your finances.

Step 2: Budget

Once you are content that you’ve written down all your goals, now we have to create a budget.  Don’t worry too much about what you make, start with your goals and work backwards.  Put a dollar amount on each one, as well as a date.  With your dollar amount and date, work backwards.  How much do you need to save or pay off each year to get to your goal?  What does that work out to each month?  How much each week? (If applicable).  Work through it all. 

Once you have the amount that you need to save or spend, then make that your ideal income.  If your current income doesn’t match that, you have a couple options. You can push the goal further into the future, or you can look for ways to generate more income.  That may mean looking for a better job.  It may mean moving to a better area.  You may need to invest in skill training or education to qualify for a better job.  Maybe you start a side hustle, gig or second job. 

What is your dream worth to you?  Is it worth the extra effort to make the money?  Are you willing to exchange your nights and weekends for your future self?  Can you leave behind the known and jump into the unknown? Are you friends and family holding you back?  Or are they supporting you in living your best life?  These are hard questions, and there aren’t any right or wrong answers.  Only you can decide what sacrifice you’re willing to make, and what isn’t worth it to you. 

Step 3: Break It Down

Now that you have a budget, you know what you need to make as far as income, and you know what you need to save each day/week/month/year.  This is the third step. If you want to actually achieve all those goals that you set in step one, here is where the rubber meets the road.  I assume that at least some of your goals require that you plan ahead.  Any big goal is going to take time, you’re going to have to take some time to make it happen.  Making it happen means following through on you budget and plan.  Is this exciting?  Yes, yes, it is.  Do you know why? Because carrying out your goals IS exciting. 

Step 4: Protect Your Income

Now that you have a plan and you’re putting money away for your goals, you’ll realize that protecting your income is the means to accomplishing your goals.  How do you “protect your income”? Well, first is don’t lose your job.  Second is to have some backup plans.  If you are in an industry that might fall to layoffs, or is subject to seasonal changes in hours, or any other type of vagaries of working life, then you will want take steps to ensure that you can keep your income. 

This may mean figuring out how to make multiple income streams.  It may mean making sure that you are indispensable. Maybe you need to start taking classes or training so that you stay up to date on your skills.  It may mean that you get insurance so that you can keep income, and/or cover your bills if you get sick, injured, or lose your job. 

It also means being smart about filing your taxes. File them on time and make sure that you get all the deductions and credits that you are entitled to. Here’s the tax prep software that I have used for years. (As an Amazon Associate I earn from qualifying purchase. Thanks!) It’s very easy to set up and use.

Step 5: Ditch Your Debt

Step five is to ditch your debt.  When people talk about learning how to fix your finances, this is the big thing that they focus on. Many of us have debt, whether it’s student loans, car loans, credit cards, mortgage, home equity Line of credit.  If you have debt, then you are paying interest on the principle of that debt.  And yes sometimes, going into debt is necessary to take the next step.  Some debts are (sort of) good for you.  Mostly, if you can make your payments on time, which can positively affect your credit score, and allow you the freedom to qualify for lower interest rates in the future. 

That being said, it’d still a good financial decision to lower your debt and pay less interest.  Effectively this allows you to save more towards you goals.  And if you do end up with a shorter time horizon, and you need to finance a goal, with debt, it will allow you to get a lower interest rate and cost you less than if you were paying a higher interest rate.

Step 6: Plan and Save for Retirement

Now that your debts are lower, or gone, the sixth step is to plan and save for retirement.  Hopefully, retirement was on your list of goals, however, if it wasn’t, the reality is that you will likely outlive your ability to work.  If your plan is to live off the money that you earn from work, then you will need to work until you die.  Most of us will not be physically, or mentally be able to continue working into our eighties and nineties. We’ll still be alive, however, work will no longer be a realistic option. 

For those reasons, we need to plan ahead and save for retirement. 

If you’re smart, you’ll invest for this. Why?  Because, you can A) save just enough money to live on for an indeterminant amount of time or B) save enough that you can live off of the interest that it generates.  You will have enough money coming in each month to cover your expenses, without touching the principal of your money.  In this scenario, your money will last as long as you do, and most likely allow you to leave a nice chunk of change as your legacy.  That may mean leaving an inheritance for your kids or grandkids, it may mean some significant donation to causes that you care about. 

In any case, it’s way better than leaving a huge pile of debt that your family will have to pay off for you.  Little known fact, your debt doesn’t’ necessarily go away when you do.  If you DON’T save for retirement, you may be leaving your kids with added debt to pay off, on top of what ever they have generated themselves.  Don’t do that.  Don’t do that to your kid(s).  You don’t want your legacy to be one where your kids have to work overtime for 30 years to pay off your debts. 

Step 7: Invest

This leads to the seventh step, which is investing.  As I said, you NEED to invest.  Investing is the key to not having to work.  Once you make enough in interest that it covers your expenses, you don’t HAVE to work anymore.  That’s the thing.  That’s what you want so that you can do whatever you want.  This is the key to true wealth and freedom.  This is how you win at learning how to fix your finances.

Anyone who says that saving and investing are stupid, is in fact, stupid themselves.  The people who make enough that they don’t have to work anymore are the smart ones.  They get to have true freedom to follow their passion and do what ever they want.  They can help others, they can travel, they can do whatever they want, whatever goal they want. And it will happen because you cared enough to learn how to fix your finances.

Step 8: Estate Planning

And the last part is one that I’ve alluded to before. You aren’t going to live forever.  No one does. Technically, you don’t NEED to have an estate plan.  Yet, if you choose not to have an estate plan, then the state will decide what happens to your money and stuff when you die.  And you’ll be dead, so it won’t matter to you at that point. 

However, whoever you leave behind WILL care.  They will have to deal with all your stuff.  This is a convo that you need to have.  How much do they want to deal with once you’re gone?  Are they already super busy with life? How much are they already dealing with?  Is it realistic to expect them to sort out all your crap?  Do you just want all your stuff sold at an estate sale?  Are there heirlooms that you want to go to someone in particular?  These are the questions that you need to ask yourself.  And again, what to do you want you legacy to be?  When you’re gone, do you want them to find EVERYTHING? Please, please, think about all this ahead of time, and do what you can to make it easier for your people. (Winston, 2023)

Now you know how to fix your finances

So, wow.  We’ve walked through everything you need to do, step by step, to get a real picture of your current financial position, as well as what you need to do to set and achieve financial goals.  What do you think? Where are you?  Let me know in the comments below. 

Is this helpful? Did you learn something new?  Do you know someone who needs to stop being afraid of money and learn how to fix their finances? Please pass this along.  We all start somewhere, so wherever you are, whatever your financial picture is, you can start dreaming and planning. You can figure out what you need to do next to move yourself along the financial ladder towards whatever your next step may be. 

Did you like this post? Want more? Every month I publish an email newsletter with a summary of the posts from the previous month, journal prompts and monthly challenges. If that sounds like your kind of fun, sign up below! I hope to see you in your inbox 🙂


Financial Health Network. (n.d.). What is Financial Health? Retrieved from FInancial Health Network:,be%20resilient%20and%20pursue%20opportunities.

Kagen, J. (2022, 04 12). Financial Health: Definition and How to Measure and Improve It. Retrieved from Investopedia:

Winston, H. a. (2023). 8 steps to a flexible financial plan. Retrieved from Principal:

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