Bringing order to financial chaos consists of 5 major stages:

1. 1. Denial. “Oh, things will be better next month. This month was just an unusual month so I had to borrow money.”

 

1. 1. Frustration. “I can’t seem to get ahead no matter what I do!”

 

1. 1. Seeking. “Enough is enough. Can anyone tell me the best way to make a budget? How does the debt snowball method work?

 

1. 1. Acceptance and progress. “It was tough to cut back, but I’ve worked hard and saved up $1000 in my emergency fund. I finally have some traction!

 

1. Continual learning + overcoming setbacks. “I’ve got my credit card debt paid off, now I’m ready to figure out how to open a Roth IRA. Right after I pay for this dishwasher repair and replenish my appliance fund. Once I get that done, I’m going to work on _____.”

Of the five, denial and seeking can be the most difficult to get through.

Working through the stages

Let’s take denial first. If you won’t even admit to yourself that something needs to change, things aren’t going to improve. When every month is an unusual month, they’re normal. You’ve got to stop making excuses and start taking action.

Once you get out of the denial stage (which I was stuck in for years!) you’ll typically start trying to improve things on your own. You might already know how to take care of some things (like paying your bills on time) but there will be areas that you have problems with. No one’s born a financial whiz, but somehow we think we should magically be able to fix our problems right away, all by ourselves. When that doesn’t happen, we get frustrated and start looking for answers.

That’s the seeking stage, and surprisingly it can be pretty difficult. That’s because we may not like the thought of doing what we hear. Stuff like “live on less than you earn”, “get out of debt”, and “maybe you shouldn’t spend 30% of your income on a car” can be hard to stomach.

The most important part

If you find yourself looking for help and then rejecting all of the advice you’re given, you aren’t ready to change. You’re still stuck in denial, whether you realize it or not. To move past that, you have to be willing to turn one or more of your “well but I can’t do that because ____” statements into “I’m going to find a way to do that anyway.”

Being willing to change is a huge part of the battle. Once you get the ball rolling with that, the last two stages are easy in comparison. They’ll still take time and work, but you will slowly begin to bring order to your financial chaos. You’ll be glad you did.