When it comes to getting your finances in order, knowing where to start can feel overwhelming, but you’re not alone in this!

Let’s look at Jaxson’s situation—a 24-year-old with his first full-time job earning $40,000 in California. Jackson is eager to build a solid financial foundation but isn’t sure where to begin.

Understand Where You Are At

The first step is all about self-awareness. Take a close look at your financial situation. What are your spending habits? How much do you owe? How much do you save? Understanding these basics will give you a clear picture of your starting point and the habits you need to work on.

Build an Emergency Fund

Next, focus on building a financial safety net. Start with an emergency fund (aka rainy day fund) that can cover three to six months of living expenses. For Jackson, who is spending about $2,800 a month, that would be a total of $8,400.

This safety cushion ensures you’re prepared for life’s unexpected twists, like car repairs or medical bills. It’s your financial security blanket, and once you achieve this, you can start thinking about a longer financial runway.

Tackle Credit Card Debt

Paying off or staying out of consumer debt is a crucial next step. Credit card balances and personal loans are particularly important to address because these types of debt can drain your resources with high-interest payments. By tackling these first, you free up more of your income for saving and investing, setting the stage for financial stability.

Align Career with Your Strengths to Grow Income

Beyond saving and managing debt, think about your career path. Are you in a role that maximizes your skills and potential? Investing in yourself and your career can lead to higher earning potential, which provides greater opportunities to save, invest, and enjoy life.

Think about taking personality quizzes such as Gallups Strengths Finder, Myers & Briggs, Working Genius to find a career that aligns with your unique skillset.

Money is About Emotions Too

Finally, remember that personal finance isn’t just about numbers; it’s also about emotions. Your money should work for you and help you feel secure, empowered, and ready for the future. This is why we advocate for a balanced approach that supports both your financial growth and your peace of mind.

These steps aren’t just for Jackson; they’re for anyone who wants to feel more confident about their financial future. By assessing where you are, building a safety net, managing your debts, and aligning your career goals, you’ll be well on your way to financial success.

Feeling inspired to take control of your financial future? Schedule a coaching session today and let’s create a personalized plan tailored just for you.