Six Tips to Get Your Finances in Order

If you’re feeling anxious about your finances, taking steps to put them in order and feel in control is the best place to start. Creating new habits and setting your sights on the future can make all the difference.

“Whatever mistakes or bad circumstances got you to this point are in the past, and the past does not define you. Anyone can turn their situation around, even if it seems impossible in the moment,” said Thomas Maluck, an NFEC Certified Financial Education Instructor.

Here are six tips to help you get started.

1. Take control of your finances

It’s natural to feel unsure about making financial decisions. And if you’re struggling with money, it may be tempting to throw up your hands. 

In fact, doing nothing often feels like the safest thing to do. But it's probably not the best approach. Here are some actions you might want to consider on your way to achieving financial security.

Go back to the beginning

A first step toward improving your financial outlook is to understand how you got off track in the first place. Maybe it was a job loss, a major medical bill, or a life-changing event such as a divorce. 

Examine your full financial picture

Take an honest look at your current financial situation. What’s going well? Perhaps you got a new job recently, or a raise, or a better-than-expected bonus. What’s not going so well? Maybe your debt leve lgrew, or you were hit with an interest-rate hike that affects your mortgage or other payments.

Focus on what might be improved

Maybe you got too busy and stopped paying attention to your finances. Just like small habits may be roadblocks to financial stability, there are also small positive things that might put you on a solid financial path.

When you have all the relevant facts, it’s easier to find the best action you might take to change course. That might mean taking steps to automate savings by directing part of your salary into a dedicated account. Or maybe it’s picking a new strategy for chipping away at that debt as aggressively as possible.

There is usually something you can do now. And if you feel overwhelmed, that’s a sign that you might need to narrow your scope.

2. Learn from your mistakes

Many of us have made financial decisions that turned out to be costly mistakes. What’s important is to identify any missteps as soon as possible.

Avoid credit pitfalls

Credit is an important financial tool. Unwise use of credit can be a common money mistake. It may be relatively easy to open a credit card account, and even easier to rely on credit to live beyond one’s means, at least for a while. But it may become a trap if you carry revolving debt and pay only the minimum amount or make late payments.

Determine what is driving your spending

Emotional spending, like shopping when you are sad or bored, is another common financial misstep. Some people get in trouble because they spend beyond their budget or don't fully understand the annual percentage rate (APR) they are paying on their debt.

Examine how you view things

Running from poor financial decisions only hurts in the end. So why not adopt a growth mindset instead? With a growth mindset, you can acknowledge that you’re only human and that you can learn to improve your relationship with money.

This may help put you in a frame of mind to rethink the role of budgets and strategies when setting your financial goals. Then you may be able to forgive your past mistakes and improve your financial future.

“First and foremost, if you are feeling financial stress, be kind to yourself,” Maluck advised. “Your money does not determine your self-worth.”

Remember, mistakes might help you succeed if you are able to learn from them.

3. Commit to one positive financial habit

As you dig into the process of putting your financial life back on track, you might find yourself overwhelmed by the list of “musts.” Must save more. Must spend less. Must pay off debt. Pick one and commit to making it happen. Then move on to the others.

Give your financial priorities the time they need

Financial anxiety may push you to shift from one priority to the next, before any one effort bears fruit.

Instead, allow yourself to pause and choose one small financial habit to change, one you know is within reach. It might be paying $20 more than your minimum credit card payment each month or getting rid of one streaming service.

Ride the momentum of success

One small success may lead to another, and every dollar saved will add up over time. Most important, you’ll gain confidence and develop positive financial habits for tackling even bigger goals.

4. Assess your debt situation

Struggling to find financial stability? Debt may be part of the problem. If so, it is important to have a clear plan about how to tackle it.

Distinguish good debt from bad

First, it’s helpful to understand exactly how much debt, including credit card balances, you have. Then assess what is good debt and bad debt for your individual situation. Generally speaking, good debt involves loans or credit tools that help you reach financial goals. Debt may be bad or damaging if it puts your financial health at risk.

Make debt reduction a primary goal

While it’s always important to build savings, making it a priority to pay down your most expensive or riskiest debt might make a significant difference to your finances. When you are out of debt, you may be able to ramp up your savings.

Look for ways to shrink interest payments

In addition, explore every option to reduce your interest payments. If you carry a balance across one or more higher-interest credit cards, you may be able to consolidate that debt with a personal loan and cut down the total amount of interest you pay. 85% of surveyed customers said they saved money by consolidating debt with a Discover® personal loan.*

5. Ask for help

Many people circle around our financial woes and try different tactics but never manage to make much progress. This might make the situation feel hopeless.

“If there is anything you do not understand about your paycheck or your bills, it’s time to ask for help,” Maluck said. “You need to know how every dollar enters and exits your orbit.”

Work with a professional

An experienced financial professional may help you set realistic, reachable goals for the short term. They may be able to help you with a debt-reduction strategy and to lay a solid foundation for future savings and investments.

Seek out a reputable organization or financial buddy

Depending on your situation, you could contact a nonprofit credit counseling service to help you learn how to develop a workable budget. Or consider asking a trusted friend to be your accountability partner as you work on new financial habits.

6. Consider the benefits of a personal loan

When trying to improve your financial health, your personal debt situation may be a good place to start. If you have several high-interest loans or credit card balances, consolidating your debt with a personal loan could be a smart step. It may be just what you need to achieve your long-term financial goals.

Add predictability to your monthly budget

A personal loan is an installment loan with a fixed rate and set repayment term. It may make budgeting easier and more predictable to have one set regular monthly payment.

Reduce your repayment time

Another benefit of a personal loan is that you may be able to shave years off your repayment time compared to the length of time it might take to pay off revolving credit when making minimum monthly payments.

Plan on a fixed interest rate

A personal loan to consolidate higher-interest debt might also help you save on interest. Because you lock in your interest rate for the term of the loan, a personal loan eliminates the risk of variable interest rates and rising payments tied to revolving loans. Even small interest-rate increases may cost you more money on variable-rate debt.

Choose a repayment plan that works for you

Flexibility is another benefit of a personal loan. You choose the repayment term that fits your financial situation, from 36 to 84 months. With Discover® Personal Loans, for example, if you get approved for a $15,000 loan at 12.99% APR for a term of 72 months, you’ll pay just $301 per month.

If you want to get your financial life back on track, let Discover help you get started, with lending options tailored to your individual situation.

A personal loan may help you save money on interest while you pay down debt. To see your potential savings, try our debt consolidation calculator.

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.

*ABOUT SURVEY

All figures are from an online customer survey conducted in September 2024. A total of 736 Discover personal loan customers were interviewed about their most recent Discover personal loan with 546 of them using the funds to consolidate debt. All results @ a 95% confidence level. Respondents opened their personal loan between January and July 2024 for the purpose of consolidating debt. Agree includes respondents who ‘Somewhat Agree’ and ‘Strongly Agree’.