It can be pretty intimidating to start managing your money if you’ve always been a “have-money-will-spend-it” type. Few of us previously gave money management much thought until we got a wake-up call. If that sounds like you, don’t fret. Here are four ways to look at your financial life and start building a plan of action for a better tomorrow.

How Much Debt Do You Have?
A cornerstone to getting your financial life under control is to realistically look at how much debt you carry. It is easy to ignore your debt and hope it will go away. However, if your debt consists of high-interest credit cards (or worse, payday loans!), every day you ignore your debt it will grow more dangerous. Dangerous? Yes. Not only can excessive credit card debt wreck your credit score or rob your future security… it can stress you and depress you like few other circumstances.

What should you do? First, truly add up your outstanding debt and look it in the eye. Next, figure out which part of the debt you want to attack first. Dave Ramsey coined the phrase “Debt Snowball”. Pay the most toward your highest interest rate debt first. Continue to pay the minimum due on all others. Then, when your highest interest rate is paid, roll the difference on to your next debt. Repeat. (Some think it is better to attack your smallest debt first for psychological satisfaction. What do you think? Discuss in our community).

How Much Have You Got in Savings?
Okay… now I’m going to scare you. Are you ready? Here it goes. Most Americans have little to no savings cushion. That means two things: one, that when a short-term emergency happens you have to rely on your credit card. And two, most of us are wholly unprepared for situations like job loss. I’m sure you’re an intelligent person who reads or watches the news. Have you heard about the changes going on in the economy? You must be prepared.

What to do? Set aside a small amount each week to build up an emergency fund. Yes, even if you have debt. Find the extra money by really looking at areas in your life where you can reduce spending, and look for ways to earn more. If you struggle to stay committed make your contributions automatic or enlist the support of a friend. You’ve got to make saving a habit or you will continue to struggle at every bump in the road.

How Are You Preparing for Changing Times?
Some people can’t admit it, but, times change. So must you. Here’s an example. Once upon a time it was possible for the Average Joe to earn enough to support a family and a middle-class lifestyle by having a high school degree. There were lots of hourly jobs that paid well. Then these jobs went elsewhere in the world where people work for less. Why? Because we Americans are addicted to buying things that do not reflect their true cost.

And then it changed again.

For awhile it seemed pretty secure to go to college. You could get a professional degree that taught you something specific. This seemed like the ticket to a secure job. But now it is possible for routine doctor work — like review of radiological x-rays — to be performed more cheaply overseas. That was an example from the book “A Whole New Mind: Why Right-Brainers Will Rule the Future” by Daniel H. Pink. He boils it down your future job competition to three things: Abundance, Asia, and Automation. What are you doing right now to stay competitive in the marketplace? Your money needs to know.

What to do? Look at your skill-set. If you’re already between jobs this is an excellent time to work on making yourself more competitive. You’re literally competing with the rest of the world!

Are You Ready to Grow Old?
And finally…who is going to support you when you grow old? When you’re unable to work? There’s just one person you can rely upon and that is YOU! If you already save and invest for your future, good for you! But can you do more? Chances are you could save and invest more if you were really determined. And I hope that you are because every dollar you put away today will grow and multiply.

What to do? If you haven’t started your retirement account — start it TODAY! Choices can be overwhelming but you can evaluate various financial products quickly and easily here.

Finally, these four areas of your financial life CAN be intimidating and scary. However, I can boil it down even further for you. First, you must really decide today that you’re ready to make changes in your financial life. No one can do it for you. Secondly, you need to accept that you can’t be perfect when you’re changing habits… even financial habits. That’s where a community of motivators will help you stay focused and on track. Just get started! Only you can build a better financial tomorrow.

Good luck — and let us know your progress in these four financial areas!