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Have you woken up one day, looked around, and wondered where all the debt came from?  What have you got to show for the multiple credit card balances, student loans, and empty bank accounts?

Are you feeling ready to take the proverbial bull by the horns and start cleaning up this financial mess you’ve found yourself in?

Feeling overwhelmed about how to get started? Don’t fret….we are going to walk through this together.

I have been where you are, I have felt how you feel and I have lived to talk type about it!  By now you have your money mindset on point and you are ready to get started.

» READ MORE: How to create a simple monthly budget you can stick to

The next step is to get out your trusty pen and paper and get to werkkk!

Much like they say about losing weight, so is cleaning up your finances.

This is going to take patience and time.  This didn’t just happen overnight?!  Your current financial life is a culmination of months, years, maybe even decades of bad decisions.

It took time to get yourself to this place and it’s going to take time and lots of hard work to get yourself out! Just so we are clear….this is going to take HARD WORK [repeating for dramatic effect], but please believe me when I tell you it will be SO worth it!


My Budget Better 5-Day Email Course will give you a better way to manage your money consistently and confidently.

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What is Financial Inventory?

In order to get off on the right foot, it is imperative to get a solid picture of what you are working with.

Warning: this can be really emotional.  Put on your big girl panties, grab your notebook, calculator, and maybe a strong drink!  This won’t take long but it is a very important step.

If you have a spouse/partner on board ask them to join you for this as it will be to your benefit to work as a team!

Money is a big part of your life, and when you learn how to get your finances under control, all areas of your life will soar.


Total Your Bills

Get all your bills together, and write them all down.  Every single recurring monthly bill. (not credit cards yet) Any car leases, utilities, child support, alimony, and any other obligations that are monthly.

Just list the bill and the amount. For any loans, we are focusing ONLY on the minimum payments due at this time.

Total Your Debts

Next, you are going to list all your debt!  All of it. Get the TOTAL outstanding balance at this time. *take a few sips of your drink if needed*.

Be sure to also include any deferred student loans, credit cards with 0% interest, anything that you owe to somebody else should go here.

Any mortgages on any properties except your primary residence belong here as well.  Total it all up.  *breathe*

» READ MORE:  Our debt story pt 1 – How we found ourselves in $35,000 of debt

Total Your Assets

Head to your assets now.  Get the balance of any and all NON-retirement accounts and investments.

Anything that is already in a retirement account will incur large penalties if withdrawn early so we want to leave those alone!

We do, however, want to include any [non-retirement] single stocks, mutual funds, cash value of any whole-life insurance policies, checking accounts, savings accounts, and any shoe-boxes-filled-with-cash under the bed!

Be sure to add up each column and that’s it!  This is a simple exercise but it can be really emotional!

Maybe your situation is direr than you realized (boo), or maybe it’s not as bad as you had initially thought (yay)!?

Either way, if you aren’t clear on where you are starting out it will be hard to develop a clear plan for where to go!

When I first did this exercise one night while B was at work I felt like my throat was closing up and I couldn’t breathe.

My anxiety was at an all-time high and when I saw that big $35,000 at the bottom of the “debt column” and the big fat zero at the bottom of the “asset column” I felt so hopeless.

I had never really added up all our debt and those numbers, in ink, staring back at me were like a slap in the face.  That was it.  That was rock bottom.  We really had nowhere to go but up….so up we went!

And so will you.  Have you gone through this process before?  Were you shocked or already pretty clear on your current financials? 

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Owner | Founder at Cents + Purpose | Website

Kristin Stones is the owner of Cents + Purpose, an online community dedicated to sharing practical personal finance content. Her mission is to equip women with the necessary tools and knowledge to take back control of their money and live a more purposeful life. She creates actionable content to help her audience achieve financial wellness using her simple approach to managing money - all learned through her personal experience of paying off almost $55,000 of debt in under two years.

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