If you’re struggling with your finances, you may be looking for the ONE thing that you can do to pay off debt and amass savings.  


Should you do the snowball method? Do you save first or pay off debt?


None of these questions are all that helpful until you understand what your core issue with money is.


When you accurately diagnose your situation then and only then can you find the right strategies to turn your finances around.  


(This is a long and detailed read so snuggle up and let’s sort out your issues together, shall we?)


The question you want to ask yourself is:  Where are you and what actions can you take right now?

If you’re going to change your financial life and build wealth, you’ll need a roadmap.

But a roadmap needs an X that says “you are here.”


You need to know where you are starting from before you can map out a plan to get to “there” wherever that destination may be.


See, there are four phases to money. Some people never find themselves in phase one, some or born into phase three but there can only be three phases.


If you can figure out exactly where you are in your journey, you’ll quickly know exactly what to do next to achieve financial mastery.


Word of caution:  This roadmap works best for people with high aspirations and is willing to put in the effort to achieve their financial goals.  Many people only wish for financial independence but when it really comes down to taking action, they’re not up for the sacrifices of time and effort to make it happen.     

So here are the four phases (and I’ll share with you examples of my journey to give you some perspective.)


Phase I:  In Debt, Little to No Savings


Phase II:  No Debt, Accumulating Savings


Phase III:  Testing Investment Vehicles, Selecting Primary Vehicle


Phase IV:  Grow Your Principal, Live off Dividends, Interest, Passive Income


Today we’re only going to focus on Phase One.


Phase I:  In Debt, Little to No Savings 


This where I started. $30,000 in debt, no savings. In this phase, you’re spending either all of what you earn or more than you earn.


The question is why?  Could be one of three issues:

(A)  A spending issue (you are mismanaging the funds you have and are unable to pay for the lifestyle you want, so you dig yourself into debt to create it.)


(B) An underearning issue.  You manage your funds well, but you don’t simply don’t earn enough to cover your costs of living, forcing you into debt with no savings.


(C) Both.  You don’t plan your spending or track expense routinely PLUS you don’t earn enough.


If you identify with (A) and it’s an overspending issue, then here are some preliminary steps you can take today to turn your finances around and pay off debt:

  • Get organized.  Take out all your bills and organize them in one place.  List out everything you owe, list out all your expenses and list all your income.


  • Take out a calendar and write down when you get paid and when each bill is due. 


  • Call and ask to reschedule due dates for certain bills so that your bill pay schedule is divided evenly among each paycheck.  That way you don’t have a cycle where all your bills in the first half of the month (and you spend all your cash and need to float on credit cards until you get paid again.)  


  • Cut the credit card now.  Switch to all cash immediately.  Freeze your cards or cut them up but do not close your accounts. That will hurt your credit and it’s unnecessary.


  • Do not pay any collection bills at this time.  Your credit will not necessarily improve by paying them and the harm has already been done to your score so you’re better off sending those calls to voicemail until a later date.  (Fight me on this one, I dare, you!)


  • Open up a savings account that is not directly linked to your checking.  Ally or American Express (at the time of this writing, 2018) are you great options. You want a place to park your cash where it’s relatively inconvenient for you to access it.


  • Open yourself up to the possibility that in order to win the long game of wealth, that you must live in the financial present.  You must get yourself financially current. Practically, that means, checking your cash accounts daily, paying all bills on time and in full.  Putting money into savings first thing after getting paid even it’s $1.


  • Banish the belief that getting rich or building wealth is a quick, one-time event.  No. It’s a lifestyle. It’s a way of being. It’s about playing the long game, which is comprised of daily action and commitment to financial excellence.  The sexy stories about hitting it big, faking it till you make it, spending money to make money are absurd. Investing in the right things at the right time while having a constant eye on the bottom line is where real wealth is accumulated.  There’s no way around it. Hate to pop that bubble, but someone’s gotta tell you the truth.


If you identify that (B) is your issue, underearning then here are some preliminary steps you can take today to improve your situation:


  • Get organized.  Take out all your bills and organize them in one place.  List out everything you owe, list out all your expenses and list all your income.   Look at how much you bring in per month, versus your fixed expenses. How much money is actually left over? If it’s barely enough to get by, or you’re running a deficit, then underearning is definitely the issue here. You’ll need to earn more.


  • Work backwards to your desired salary. How much money would you need to bring in per month to live your current lifestyle, pay off debt and save aggressively?  Multiply that number by 12 and then multiply that number by 1.5 to account for taxes. That’s the yearly salary/income you’ll be aiming for.  Remember when you earn $100,000 you don’t really bring in that much with taxes, insurance, social security, 401K and other deductions. But in the corporate world, we speak in gross compensation, not net. So when you do your calculations, make sure to factor that in.


  • Study the economics. (I know what a snooze!) Now that you know the salary you’re aiming for, it’s time to do an economic reality check.  
    • Do you have the skills necessary to command that salary or those fees?
    • Do you have skills that are in high demand?
    • Are you in an industry with depressed wages because there are too many qualified workers?
    • Do you live in an area where geographically wages are depressed across the board?

If you answered yes to these questions, you’re going to want to strategically look at all the external factors that might be influencing your current earnings.   


  • Warm up your network.  Everything you need comes to you through other people. And you can forget six degrees of separation.  According to a 2012 study, highlighted by power connector Judy Robinett, with the power of the Internet and social media, most people are only separated by 3.74 “intermediaries.” That means you are closer than ever to all the resources, opportunities, knowledge and introductions you need.  
    • Make a list of everyone you know. A good size list will be about 100 or more.  150 if you’re super friendly like me. 🙂
    • Then offer to take 10 or so colleagues, old co-workers, acquaintances friends out for coffee.  The money spent on coffee is an investment in relationship building- which is where all the magic happens.
    • Then offer to help them with anything they need and ask if you may count on them to do the same.
    • Repeat this process as needed to move closer towards your goal of finding higher paying work.


  • Track your time.   The biggest complaint I hear from people who are underearning is that they somehow don’t have “time” to look for new, higher paying work.  And while it may feel like that, the data never lies. Open up an Excel spreadsheet, or even just a plain ol’ notepad and commit to tracking all your daily activities for one week how long each activity took.  Tracking your time for a week will open your eyes to a few key points:
    • (A) The fact that most things that you think take a lot of time in your head, take a minute or two at most.  
      • Sending an email to an old coworker to invite them for coffee, for example, should take no more than 3 minutes.
      • Meal prep feels like this enormous project that isn’t worth the time relative to the financial savings – but when you measure it, hey, it’s only 1 hour out of your Sunday, one day a week.
    • (B) That if you’re being honest, you’re wasting time on non-productive activities. Lookin’ at you Instagram, cough cough…
    • (C) That you have more than enough time to move your life goals forward if you’re intentional about how you spend it.  We all have the same hours in the day as Beyonce. Get real.


  • Create a “to-done” list for earning potential activities.  To-do lists set us normal people up to fail.  To-done lists, however, are a great way to track what you’re actually accomplishing.  What you’re actually getting done in the direction of finding higher paying work.


Here’s how to to do you’re to done list (heh):

    • Make a master list of every outreach activity you already completed that counts towards finding higher paying work.  Track ONLY after it’s completed. For example, for one of my past clients, she knew she had to accomplish at least three activities at day to advance her job search.  
    • Activities could include:
      • Sending  a resume to a recruiter
      • Taking a friend out for coffee
      • Asking for an introduction
      • Getting feedback on her resume
    • If you’re in sales or you run your own business, this could include
      • Reaching out to past clients for referrals
      • Cold emailing prospects
      • Offering free talks or speaking engagements to associations
      • Sending out a letter to acquaintances in your networking updating them on what you do

Point is, these are activities that move you towards higher earning opportunities and you track them once you’ve completed them.  So many people underestimate just HOW Much outreach, connection and activity is necessary to find work that pays you appropriately.  

And it can take much longer than expected. Which is why if you commit to tracking your to-done list you will be much more likely to stay on track without getting discouraged.


  • Understand that lucky breaks and opportunities aren’t linear and will come from unexpected sources.  Keep a generous, warm, helpful attitude throughout your process of reaching to others.  You never know where your big break will come from. Again to quote my friend Judy Robinett:  There’s an old saying: You have to shake the apple tree hard to get the apples to fall, but it’s never the apple tree you shake.”  Meaning, if you keep up your end of the bargain (reaching out to people regularly, asking for what you want and giving generously before making your ask) that new higher paying job or opportunity will eventually show up for you. Could be a month, could be a year.  That’s not up to you. The activity levels are all you can control.


And of course, if you find yourself in category C,  Overspending and Underearning, then you’ll have to do ALL of these things.  


Massive problems require massive action to turn them around.  So if you find that you’re overspending and underearning, attack part one first and get the finances partially under control and then start your quest to find higher paying work that will help you pay off debt and save.


I was both underearning and mis-spending my money.  So everything you see listed here, I did. I got my finances organized, worked backwards to see how much money I would need to earn to pay off my debt and start some form of savings.


And I got to work reaching out to people, with absolutely zero expectations knowing deep down that if I showed up and helped others and clearly communicated what I was looking for, that eventually, my lucky break would come.


Well after a few weeks of putting myself on this financial turnaround plan,  I was out having drinks with an old coworker I hadn’t seen in a few months. I didn’t talk about my finances but I did mention I wasn’t all that happy in my current job.  


The next morning, my old coworker was riding the elevator with the head of the marketing research department at her firm. The woman mentioned to my friend that one of her managers was leaving asked if my friend knew anyone. Because we had just gone out for drinks the night before, my old coworker recommended me. Two months later, I was hired at the highest salary I’d ever earned.


So it is possible to make your own luck as long as you commit to making time for deliberate, consistent outreach to people who can help you.  


Well, we’ve covered a lot of ground here and I hope these tips will help you to get yourself out of Money Phase I and into Phase II, which is little to no savings but at least no consumer debt.


Until then, meet me in the comments with questions or praise!

And, of course, if you’d like my help in creating a personalized, step by step, plan to holistically turn your finances around by taking powerful daily action that move you forward, then please consider applying for a free session with me.


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