Dear Mrs. Riches:
I'm nearing 40, so you'd think I would have gotten my financial life in order by now. But alas, I haven't. I have virtually no system for keeping track of my bills, and avoidance is my most-used money management strategy. I don't even want to think about how much I pay in late fees, much less lost opportunity costs. I need some suggestions for how I can finally get myself on track, on a budget, and better organized. (By the way, please don't tell me to use money management software; I have tried a couple of programs and I can't get them to work.) Can you help by providing some good, practical suggestions?
-- Fiscally Unfit
Dear Fiscally Unfit:
The good news is that it's never too late to get financially fit. The bad news is that you'll have to make some effort and some changes, which can be hard.
Start with a positive attitude. Yes, it's true you could have done this sooner in your life, but you didn't; beating yourself up about lost opportunities will only make financial reckoning a more onerous task. Instead, use logic to identify your biggest roadblocks. For some folks, those may be emotional (their attitudes and beliefs about money); for others, they may be practical (lack of time or expertise).
Either way, you may want to enlist some outside help, particularly if you're a habitual avoider. Why not give a daily money manager (DMM) a try? Instead of paying late fees, pay a professional to get your bill-paying house in order by setting up automatic drafts, organizing payment due dates, balancing your checkbook, and organizing paperwork. Too frustrated to struggle with the Quicken setup? Your DMM can do it for you or provide you with assistance every step of the way. Some folks enlist the help of a DMM regularly; you may just want to hire your DMM for a few hours to get your organizational efforts off to a strong start.
To get help developing financial goals, follow up your DMM meeting with a trip to your friendly certified financial planner (CFP). While the DMM handles day-to-day details, a CFP will help you plan for the big picture with advice on college savings, retirement, saving to buy a home, and other goals.
Assembling a knowledgeable team of supporters is an intelligent step toward improving your financial outlook. Hiring a financial professional doesn't mean you'll get off with no work, but it does mean that you don't have to go it alone.