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11 Steps to Transform Your Finances (For Good This Time!!)

transform your financesThe money comes in…the money goes out…and at the end of each month you have very little to show for all your efforts. Then, after buckling down for a bit and saving here and there, it feels like you’ve gained a little traction…until another unexpected bill comes along and takes your bank account down to nothing (or probably more likely, racks your credit card back up to the max instead of down to zero like you were fighting for). It’s time to change this. Now is the time to transform your finances.

And not only that, it’s time to transform them for good!

11 Steps to Transform Your Finances (For Good This Time!!)

I was in your shoes once. I was newly married and my wife and I were living on our own, 1,400 miles from home. Based on the quick, back of the napkin calculation I did a few months earlier, I figured we could get through each month with a little bit of money to spare. 

Well…I was wrong.

We struggled for quite a while and desperately needed this “transform your finances” message. But unfortunately, we just didn’t know it yet.

Below are the steps that helped us get out of the crazy cycle and actually put us on a path to build wealth!

1) Get Emotional About Change

I wish everyone would just wake up tomorrow morning and say to themselves, “You know, I’ve really been spending foolishly. It’s time to make a change…”, but for whatever reason, people just don’t naturally do this…

If you want to transform your finances, you’ve either got to get pissed off about something, or life just needs to scare the crap out of you.

That’s what happened to me. 

I distinctly remember sitting at our computer desk, realizing that we were actually going backwards financially. And then it happened…we got the first (of many to come) student loan bills… I knew we couldn’t pay them, and it freaked me out (and honestly, made me a little mad). I knew at that point that something had to change!

If you want something to change in your life, you’re going to have to get mad about something…

  • Your crummy job
  • The fact that you never have any money left at the end of the month
  • No retirement savings
  • No college savings for your kids
  • And what if you lost your job? What would happen?

If there’s no drive behind your change, it won’t last. Light a fire under your butt (metaphorically of course) and get emotional about your finances!

2) Set a Big Goal

Are you in credit card debt right now?

  • How about car debt?
  • Maybe even student loan debt?
  • House debt?

It’s time for you to set a big goal. Something like…

“In 2 years, I’m going to be debt free of everything except the house.”

Set a date, write it down, and then put that goal up where you’ll see it every day. If you aren’t overly passionate about that goal now, you will be when it stares you in the face every day and you make no progress toward it… Frankly, that should just piss you off and drive you into action!

3) Set Up Smaller Goals Along the Way

If you set a goal for yourself to, say, run a full marathon (that’s 26.2 miles…which equates to like 4-5 hours of running of constant running!) by next year, that could be pretty daunting.

  • You’d probably start out all excited and go run 1.5 miles on day one.
  • Then maybe 2 miles on day two.
  • Then you’d struggle your way up to 2.2 miles on day three…
  • And then by day 4 you’ll start thinking about how big of a gap there still is between 2 miles and 26 miles… and then you’ll slowly fade away…back to the couch, never to achieve your marathon goal.

The same is true for your finances.

Over the past decade, you’ve been living a certain way and have continually been in debt, probably driving yourself deeper and deeper in the hole over time. And now, you set a goal to pay off something like $60,000 in two years… Those first couple days will be exciting…and then you’ll realize that you miss your friends so you take a night off on your strict budget…and then you get an unexpected bill in the mail….and then you get sick and have some medical bills to pay.

And then guess what?

You fell off the wagon and have little hope of ever reaching your goal.

How do you combat this?

Make smaller goals that will help keep you on track for the bigger goal.

Let’s stick with the example I gave above – you want to pay off $60,000 in two years.

  • That’s $2,500 a month (whoa!), or approximately $577 a week ($60,000/104 weeks)
  • It’s time to first set those goals so you know where you need to be in a week
  • Then, let your mind start figuring out how to do it! (even though it may seem impossible)

And, not only should you set up these mini-goals, but you should also set up mini-rewards for achieving them!

Related: How the Debt Snowball Really Works (with a FREE Debt Snowball Calculator For You!)

rich mindset4) Take a Hard Look at the Budget

Here are the rules of thumb when it comes to the different categories of your budget.

  • Your house payment should be no more than 25% of your take-home pay
  • Your cars shouldn’t be worth more than 20% of your yearly income
  • Groceries shouldn’t cost more than $200/month per person
  • And, if you’re in debt, you probably shouldn’t be paying for cable (it’s not time to sit on the couch and relax, it’s time to get to work!)

If any of the above are out of whack, you should correct them immediately. Yes, this might mean moving or selling your car, but if you really want to transform your finances, these are the steps you’ll need to take. In then end, you’ll be glad you did.

Related: How Much Should You Spend on That??

5) Start Questioning Every Bill

Beyond the big categories listed above, there’s lots of other stuff like:

  • Phone bills
  • Car insurance
  • Home insurance
  • Internet bills
  • Utility bills
  • Medical bills
  • Student loan payments

List them out for yourself. Start going line by line and ask yourself…

  1. How important is this to me (and can I get rid of it altogether)?
  2. Could I get this bill lowered?

6) Take the Time to Actually Make the Changes

It’s one thing to identify the bills you need to reduce. It’s a whole other exercise to actually make the long phone calls and negotiate those bills to a lower amount.

Pick what you think is the easiest bill to change and commit to making the phone call before the end of this week.

Tell the agent on the other end of the line that…

  • Money is tight and you’re re-evaluating everything you’re spending your money on.
  • You saw a better deal with competitor “XYZ” and you’re considering going that route.
  • …Unless of course, they can give you a better deal on your monthly bill.
  • “Is there anything you can do?”

After you conquer one bill and get it lowered, the experience can actually be quite invigorating! Now, tackle the others and see what you can do! I think you’ll be surprised how quickly you can get a reduction in your monthly bills!

Then, once you’ve done as much as you think you could (or, if you absolutely DON’T want to negotiate your bills in the first place), I’d recommend contacting BillCutterz.

  • They’ll get a few bits of information from you,
  • call on your behalf, and
  • they might even get your payment amount lowered some more!

If they find you nothing, it costs you nothing. If they save you money, you simply owe them half of the savings they got you. Easy, right?

Related: BillCutterz Absolutely Shocked Me and Saved Me Money on My Phone Bill

7) Take a Look at Your Pay Stub

Do you have any idea how much you paid in taxes last year? Do you know what all is being taken out of your paycheck?

For many, they know when their paycheck comes in each month…and that’s about it. They really have no clue what gets taken out of it, if it’s the right amount, or if they’re being price gouged for a product that should be half as much!

Here are some of the things you should be asking yourself, and what to look for:

  • How much did you earn last year? Could you have shown fewer earnings and therefore paid less taxes?
    • By putting money into a child’s college fund or a Health Savings Account, you could have reduced your taxable income on spend that you were going to make anyway!
    • And, if you’re in a position to do so, you could put money into a 401k and reduce your taxable income as well!
  • Do you have insurance payments coming out of your paycheck (via an insurance company through your work)?
    • Are those amounts appropriate?
    • Maybe you should call a couple other competitors to see if those rates are competitive
  • Is anything else being auto-deducted from your paycheck?
    • Is it necessary? Could you cancel it?
    • If you need it, could you reduce the amount?

Related: $22,000 in Taxes??? Ugh, We’re Never Doing This Again!

8) Improve Your Worth at Work

Here’s a biggie if you truly want to transform your finances. If you want to pay off huge chunks of debt every month, it’s time that you improve your worth at work so you can earn a bigger income.

How can you begin to improve your worth?

First, start with the simple stuff:

  • Show up to work 15 minutes early every day to get prepped and ready for all your tasks
  • Don’t ever miss a day
  • Talk to your boss about what more you can do and what he might need help with

Then, move onto the bigger stuff that will be more challenging, but could land you into more money in a short period of time.

  • Evaluate your job and the company you work for
    • Will the company offer you better wages if you prove yourself in your role?
    • Is there room for advancement from your role?
    • If there is, work hard and continually think about what needs to get done and what could be improved
    • Perhaps take some classes (for a degree or even certifications) so that you can bring more skills to the table
  • If your company likely won’t advance you, start looking for companies that will
    • Update your profile on LinkedIn
    • Start taking note of other companies nearby that might offer you better wages AND an opportunity to move up in the company soon
    • And, if you’re willing to move, keep your eye out for a better job in another area (they might even pay your moving costs!)

9) Pick Up a Side Hustle

According to a survey recently performed by BankRate, more than half of the millennials out there have a side hustle. Isn’t that insane?

  • They’re mowing grass,
  • Starting websites,
  • Writing code,
  • And some are even making dollhouses…

Basically, millennials have learned to hate debt. They see what it did to their parents in the last recession and so they’re charging hard to get rid of theirs and to start a better life (a no-debt life) for themselves.

And, the best way to do that…is to work yourself ragged until you’ve accomplished your mammoth goals and officially transform your finances!

Related: 6 Things I Did to Start Earning Big Money With My Blog

10) Step Back and Look at Your Long Term Track

It’s one thing to put your head down and charge forward on all your debts (which can be good for a period of time), but if you do that long enough without looking up…chances are that you’re going to pound your head into a wall…

For example, when I was 23 years old and looking for my first job out of college, I actually was offered two at the exact same time.

I had the choice between becoming a:

  1. Pricing analyst at Office Depot headquarters for $16 an hour, or a
  2. Bag room attendant at a local golf course for roughly $18 an hour (after tips)

If I was focused solely on paying off my debts, I would have taken option #2! It earned more money, it probably would have been more fun, and I probably could have even golfed for free whenever I wanted!

BUT, thankfully I thought about the long term. I knew that getting into Corporate America and climbing the ladder over time would yield me far more money than that golf course job. Sure, those first couple months/years of price proofing weren’t that fun, but that experience helped me get to where I am today – a senior financial analyst!

Take a minute and write down your long term goals:

  • When do you want to be out of debt?
  • Do you want to be married?
  • Have kids?
  • Would you rather live somewhere else?
  • Do you want to retire extremely early?
  • Would you like a completely different career path?

Make sure that, even while you’re putting your head down and tackling your debt, you’re still working toward your long-term goals!

Related: Choosing My First Job – One of the Best Decisions of My Life

11) Speak With and Surround Yourself With Like-Minded People

If you truly want to transform your finances (and do it for good this time), you’ve got to be super-intentional about who you’re hanging out with.


Because what you talk about, think about, and complain about, has a direct correlation to your success in life

  • If you constantly hear about our crappy political leaders, how employers are screwing you over, and how our entire world is going down the crapper…chances are you’re not going to be excited about learning and growing as a person.
  • If, instead, you hear about people winning, about how they’re capitalizing on the many opportunities in the world, and how life could be free and easy if you just take the right steps…then you’d probably believe it and start kicking some tail out there in the game of life!

Want success in your life? Want to transform your finances sooner rather than later? Then surround yourself with others that are either headed in that direction, or that have already arrived at the place you want to end up.

Transform Your Finances One Step at a Time

Unfortunately, transformation doesn’t happen all at once. It comes with baby steps – just one small action after another – until, after a period of time, you realize that you actually accomplished something (even though it doesn’t really feel like you’ve moved the needle that much)!

But, with those constant improvements and wins, you’ve be excited to do more, to do it faster, and to succeed to even higher heights than you ever dreamed possible when you first started!

It’s time for you to start. To start today! You’ll never regret that first step.

Best of luck to you in your financial transformation! I wish you luck, endurance, and great success!!

Get Out of Debt Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I’ve read a TON of personal finance blogs, and this article really encapsulates the best principles. Thank you, Derek, we continuously need inspiration around this house!

    • YES!!! Glad I can help, Susannah. I absolutely LOVE it when I get comments like this! Keeps me inspired to write and help everyone that’s searching for a better way.

  2. Derek – I liked this article especially because it is about an emotional mindset, not telling me to make my own laundry detergent…nothing wrong with that, but our biggest spending problems are emotion driven, not about saving $2 here and there. Thanks again!!

    • You got it! Thanks for reading, Susannah!

    • Susannah, your comment about making laundry soap made me laugh. I actually have for the last six years and I love it! ?

      And I agree with you, I just stumbled over Derek’s site, and I’m with you guys! I’m tired of the constant battle to stay afloat. Whenever we go out for fast food, my husband asks what I want to order and I always say can I just gave the five bucks my meal will cost and I’ll put it in the savings? He never agrees, but he’s fine with me not ordering. ?

      We have reached an emotional point where I know things HAVE TO change, and I admit I’m scared. ??

      • Soooo glad to hear you’re ready to change! It’s time to follow the steps and kick some butt!

        Also…it’s about 852 times easier if you get your husband on board as well. Start talking and dreaming about what life would be like if you didn’t need to think about money anymore. What if you just had a bunch of it in the bank and could just do what you wanted? It’s totally possible and it starts with taking action today!

        Best of luck to you , Amalee!!

      • Amalee – I have made my own laundry soap too…it was actually quite fun! But we still went out to dinner too often and such so it didn’t have an effect!!! Getting the husband on board has been tough for me too! I feel your pain!!

  3. Our rent is 1500/month (NY), so the calculations are a little different. While our income is similar to the one you have mentioned, we don’t have any type of debt, and we don’t tithe either. We don’t use cable, as you mentioned, it’s not a time to sit and relax. Daughter’s tennis lessons are a big investment, but it’s worth it.

    • Finances are definitely not the same for everyone! Sounds like you’ve got a good handle on where you want to put your money and what’s important to you. Keep up the great decisions!

  4. Pretty great read here. Emotions are the issue with all overspending. A challenge to the “side hustle” thing is if you are in the transportation industry and are regulated by the FMCSA rules, you can’t legally work more than 70 hours in 8 days. If you have a second job, you have to log those hours at work. Which greatly affect your primary job start times etc. It’s hard to pickup a second job when in this industry and not worry about potential legal issues. With that said, it’s a great idea. Just not always practical in my profession. Food for thought….. I’m always trying to find a way to make more money without potential legal issues. We all know if a driver gets in an accident, a lawyer will tear your life apart to find something you’ve done wrong so his client gets a big payday. Regardless of fault of course. Anyway, I rambled a bit. lol

    I found your site after finding your snowball spreadsheet via a google search. I love the spread sheet, not just to find one that I can use to enter the payments each month and do the math for me. Thanks for the information.


    • Hi Rod! Welcome to the site!

      I guess I never thought about the issues around driving hours. Are you married? Make your wife get a side hustle! I’ll write a post about it. 😉 Lol, just kidding.

      You’d have to find something that was high-paying, but didn’t require many hours of work – something you maybe have a special skill at already. Like….fixing cars, crafting something, building websites, etc.

      Anyway, that was my ramble. Thanks again for visiting. Keep coming back! We’ve always got great stuff!

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