Not Fixing. Not Optimizing. Just Seeing.
Why seeing your financial picture matters more than perfecting it
A First Real Look
You know that feeling after the holidays or maybe a weekend trip when you may have overindulged and are now scared to step on the scale and see the damage? Instead, you might avoid the scale completely. If you don’t look, it can’t be true right?
Here’s the thing though. That scale is going to know that I went back for a second helping of dessert. And if I’m honest with myself, I already do, too.
Many of us avoid looking at our current financial situation for this exact reason. The false belief that I can’t be behind if I don’t look at where I am.
I don’t think it would be shocking to know that many of us push things off, especially when we feel overwhelmed, unsure, or even fearful. Someone who knows they should be looking more into their finances, but still pushes it off, might be feeling all three.
And where does one even start?
Instead, many of us focus our energy elsewhere, on the things we can control and are more familiar with, like working hard and building a career. This likely even allows us to put something aside for a future that’s still being figured out.
That’s a decent starting point, though there’s still plenty of gaps that will continue to exist and possibly expand without a bit more intention.
If that sounds like you, it might be time to honestly look at where you are so you can stop navigating blind.
What ‘Starting’ Actually Means
When I took my own first look, I didn’t set out to build anything. I just wanted a few basic things in front of me so I could see where I stood.
I wanted to know where my money was. Spread across which accounts. What I owed and to whom. And then the one that mattered most: whether what was coming in each month was actually more than what was going out.
I wasn’t trying to make sweeping changes. I just needed to see it, so I could tell whether what I’d been doing was working or not.
Starting simple doesn’t mean it has to stay simple. But if complexity and uncertainty are what has been holding you back, a simple approach might be the right place to start.
1. Where is my money?
2. What do I owe?
3. Does my income exceed my expenses?
That’s it. That’s where I started.
This can be as simple as logging into the accounts you already have, including any you might have lost track of, like an old retirement plan from a former job. Check the balances to see what’s there and what you owe, then look at a month or two of what came in and went out.
There are tools that make it easier to track over time (I use Empower), but you don’t need one to take the first look.
Looking Is the Start; the Choices Come Next
The first two questions show you what you have. The third tells you whether you have room to do anything with it.
If more is coming in than going out, you have something to work with, and the choice becomes where to direct it. If it’s the other way around, that’s the first thing worth understanding, because nothing else can really move until that gap closes.
My own first look provided me with the realization that while I was exceeding my expenses each month, the gap was a bit smaller than I thought it would be.
I couldn’t increase what I was saving each month without making some other changes first. But I also realized that the monthly savings transfer I’d set up earlier that year was doable.
A separate look was still needed to determine if the monthly savings I’d established for myself was sufficient for the long-term, but that’s for another day.
Just seeing it laid out won’t fix anything on its own. But like stepping on the scale, it reveals the reality of where you stand. A first real benchmark. There’s a bit of relief in that, even if the gap is small or pointed the wrong way.
Knowing the true situation, good or bad, is its own kind of control. And the sooner you see it, the more time you have to correct course, or to accept where your current priorities are taking you.
That’s where every plan begins.
Yes, I’ve gone on to expand my plan. There are other posts where I go deeper into what else I’m currently capturing, the things I track now, and the areas I’ve added complexity. All of which help balance the decisions I make with where I am and where I want to be.
But just those first few inputs gave me the foundation I needed to see my financial picture more clearly.
That's the part worth remembering if you've been putting this off. The first look is smaller than the worry that surrounds it. Three questions and an honest answer. Whatever you've been afraid of finding, seeing it clearly is what finally lets you do something about it.
— Brad
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This is meant to help you think through financial decisions and tradeoffs—not tell you exactly what to do. It’s general in nature and not personalized advice (see full disclaimer).