A Financial Expert’s Confession

You know that irking feeling you get when you know something isn’t working, but you pretend all is well? That was me with my finances until the day I finally faced the music, logged into my bank account and saw the reality – I had spent my entire investment banking bonus in three months (on mostly nothing).

I realized my lifestyle was completely unsustainable and I would have to figure this money stuff out.

But that wasn’t my only blunder. I was making mistakes in pretty much every area of my financial life.

A few highlights:

• I lost thousands of dollars because I acted on a coworker’s investing advice (spoiler alert: he didn’t know what he was talking about).
• I blemished my credit for years with a store credit card that was not user-friendly.
• I didn’t realize I needed to put my roomie on our renter’s insurance policy and when she went to make a claim, she couldn’t use it.
• And the biggest mistake? I earned a six-figure salary for years and had nothing to show for it.

The irony was, I studied finance at Wharton and then worked as an investment banker, yet I still knew nothing about my own money. I thought…If I didn’t know about this money stuff with all my background, who does? It turns out, most people feel like they should know more about their personal finance.

I dug in and read books and blogs and worked to adapt the mostly dry and boring personal finance advice to my own life. I went through a life coaching program to better understand behavioral change and tailor my finances to my specific goals and values. It worked.

I put together a budget (I called it a “happiness allocation”) that allowed me to save for my goals and enjoy my life. I improved my credit. I started investing confidently and building wealth. For the first time I felt peace of mind around my money, and I wanted others to experience that too.

I have since made it my mission to share the secret sauce with women everywhere.

Long story short, I started my company, the The Fiscal Femme, because I needed it myself. 

The best part about what I discovered is that it doesn’t have to be hard or complicated. What I found is that everything you need to know can be broken down into simple and actionable steps. It can even be fun.

Where Do We Start?

Each New Year, many of us vow to completely transform our lives overnight. New Year, new me, right?

I used to do this too. I’d make New Year’s promises like:

• This year, I’ll stick with my (way too optimistic) budget.
• This year, I won’t eat sugar.
• This year, I won’t lose my patience with my partner.
• This year, I’ll do “dry January.”

I’d overcommit, go after something completely unrealistic (no fun in that) and inevitably I would break my commitments and give up on my goal.

Have you experienced this? It’s deflating! I’ve since found a much better way.

The Small-Steps Strategy

Sometimes the simplest strategies are the most profound. To completely transform your financial life, all you have to do is take small steps each week.

Not only are small steps a lot less painful, but they also lead to better results.

Here’s why:

Small steps are manageable. We can carve out a little space and fit them into our lives. They meet us where we are. And that’s why we take them!

We’re more likely to stick with them. If we bite off more than we can chew or our newfound commitment has us sacrificing other areas of our lives, we’re not very likely to keep going. For example, creating a financial plan is great but the real magic and progress comes from keeping up with it. We need to continue taking steps.

It takes time to build new habits and skills. Gradually, building new habits and skills makes it much more likely we’re going to remember and integrate that new information into our lives. Taking our finances step by step gives us that opportunity.

It’s more fun. There’s a lot more room for fun when we take small steps because it’s less stressful and we’re more likely to see results, which increases our motivation. It’s a win-win!

What I’ve seen repeatedly in my own life and helping thousands of women with their finances, is that small steps, compound and grow over time. Eventually we’re in a place that’s unrecognizable from where we started.

Have I convinced you that small steps win? If you’re in, what’s the next small step you can take toward your financial wellness?

Some Money Step Ideas

Keep a money journal. Write down (or type out) everything you spend in a day (or week) to build awareness about where your money is going. It doesn’t have to be perfect. If you forget, try to remember what you missed and pick it back up. If this step sounds horrible to you, you probably have a lot to gain from trying it!

Pay yourself first. Set up an automatic transfer (it can be as little as $5) to a savings account. If we wait to see what’s leftover to save at the end of the month, for most of us, it’s not going to happen. We think, “I’ll save when I earn more” but then we get the raise and promotion, and still, there’s no money left to save.

Open a high-yield savings account. I’m a big fan of these types of accounts because they are free, earn some nice interest, and are out of sight and out of mind. When we keep our savings with the same bank as we do our checking, it’s all too easy to transfer it over and use it. It just feels available.

Align your spending with your values. Scan through your latest credit card statement. Are there expenses that aren’t adding value or joy to your life that you can let go of? If you’re not sure, test it out. If you end up missing it, you can add it back. Bonus points if you add up how much you’ll save per year by letting go of an expense.

Check your credit. Pull your free annual credit reports and read through them for errors. We don’t want to have loans or late payments on our account that aren’t ours! You can also pull your credit score from creditkarma.com or myFICO.com to see where you currently stand as well as get tips for improving your score.

Remember, small is relative. If there’s ever a step that feels daunting, just break it down into a size that feels manageable to you.

Ashley Feinstein Gerstley, CFP, is a personal finance expert, speaker, author, and CEO of The Fiscal Femme, a financial wellness platform.