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6 Steps for Re-tooling your Finances

What does your financial life look like? Do you feel comfortable when life changes or are you unsure of  how to handle your money when it does? I know that it took me years to figure out how to adjust whenever our financial picture changed; whether it was when we joined the military, got married, had children or encountered an unexpected life event we had to adjust to the new situation by learning new skills and techniques in order to deal with the new financial demands. And it isn’t always easy. But whatever the case may be, there are some specific action steps that you can take so you can re-tool your finances and create a solid financial plan that will impact your future in a positive way no matter what change you are facing.

1. Do a financial Check-up

Like going to the doctor, having regular check-ups for your finances helps you keep things functioning properly. It is important to lay out what is going on so that you can have a realistic view of where your money is going. Trust me, like with any illness, early identification of any problems allows you to treat and take care of them before they get out of control. And that is what a check-up is all about. It isn’t to feel bad or beat yourself up if the diagnosis isn’t pretty, it’s about looking at your income and expenses finding out where you are, and identifying what is working and what isn’t. The benefit of doing so is that it allows you to see your financial life in a neutral way and gives you a place to work from.

2. Understand your relationship with money

As with all relationships, money is no different; there are those that are healthy while others are dysfunctional. So I ask you, what is yours like?  Do you hate money, resent it or stress over it, or do you have a respect and appreciation for it?  Are you an impulsive spender or a budgeter? Neither is right or wrong, but if you don’t understand how you relate and interact with money, you can’t have a relationship with your finances.

The ability to have a balanced and healthy relationship with money is very similar to our ability to have a healthy personal relationship. In order for it to work, there needs to be open communication, honesty and focused attention even when things aren’t going well. Take the time to look into how you relate to money. Determine if you are committed to a lasting relationship that is in your highest good, or if you need to step it up a notch and work on repairing what is broken.

3. Identify your spending habits

What kind of spender are you? Are your spending habits healthy or in need of some TLC? Do you purchase based on your needs or your wants? To find out a little more about your spending habits, pull out a few of your credit card statements. Highlight the items that were necessities and underline those that you just wanted or bought impulsively. What do you see? Did you cover all of your needs or spend irresponsibly? Learning how you spend and planning based on that will not only support you in meeting your long-term financial goals, but it will help you adjust to any new situation in your life allowing

4. Educate yourself about money and finances

Learning new skills and techniques is an ongoing process, and as you are faced with new events in your life you will also need to educate yourself on financial matters. We all have different frames of reference, starting points, and learning curves especially when it comes to money. We also learn differently. Some people get the most from reading a book, while others need to listen to a tape, attend a lecture or work with a financial counselor. No matter what your style, it is important to educate yourself and learn the new skills to adjust to the changes in the demands on your income.

5. Make a plan

For many people this is the difficult part, and if you are like I am I hate living on a budget or making a plan. Making a plan and sticking to it is key to making your finances work for you. Using the information you have collected in the previous steps, you can create a spending plan that is designed to work in your life. This plan will include a working budget, savings goals for the short and long-term, investments, charity contributions and anything else you choose. It’s not about how much is in each category. The important thing is that you have a balanced plan developed out of your real life situation.

6. Review and make adjustments regularly

Once you create a plan, like most things in life, that plan may need to change. Finances are no different. So many times when we think of budgeting we forget that we are the ones in control, not our cash (or lack of it). The most important thing you can do is to be flexible, evaluate regularly and adjust where it makes sense.

No matter what stage you are at in your life, a healthy relationship with your finances is critical. And a healthy relationship begins with education, understanding and planning and ends with peace of mind, balance and stability. By taking the time to retool your finances you can enhance your life and live the life you dream of.


~Judy Davis, the Direction Diva is a motivational speaker, author and lifestyle blogger as well as a military life and teen suicide prevention expert. Co-founder of DASIUM, Judy’s books Right Side Up  and Warning Signs: Is Your Teen at Riskare go to resources for families and her websites are filled with tips, inspiration and resources for those looking for direction. Connect with Judy at

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