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Personal finances can be a “deep mess”



My friend Clark once introduced me to the concept of the “deep mess.” A deep mess is one that gets worse before it gets better. Cleaning out a closet is an example of a deep mess. To get it cleaned out and organized, you first need to take every thing out. Then, once everything has been spread out and you can see what’s there, you can put it back in an orderly, organized fashion.

Starting a new personal finance or budgeting system can also be a deep mess. It will usually get worse before it gets better. But it WILL get better with consistent effort.

One of the painful things about getting control of your finances is that you inevitably find out you don’t have nearly as much income as you thought to pay for all your expenses.

My wife and I came to this stark realization and it wasn’t easy. We allocated all our income to our necessities and high-priority goals and realized we didn’t have any left for vacations, gifts, or other desires. Over time, as we’ve improved our financial management and increased our income, we’ve been able to meet some of these desires, but we still frequently have to face the stark reality of a limited income.

Some friends of ours also recently felt the “deep mess” of their finances. After going for years living on the edge of their means, they finally sat down and took a hard look at their finances. When they realized that they weren’t setting themselves up to win financially, it wasn’t pretty. All of a sudden they had to look really hard at their values and what expenses and goals were the most important. Heated discussions ensued as they worked out their differences concerning personal wants, lifestyle desires, and financial goals. It’s hard to realize that you can’t keep living the way you’re living. We are creatures of habit and comfort. But after working through their differences, they were able to make better decisions that set themselves up financially to win. In fact, they made some significant changes in their lifestyle including their housing situation.

For some people, facing the hard truth and uncovering the deep mess forces them to make major lifestyle decisions. The biggest single expense for most people is housing. If you are constantly squeezed financially and have already done your best to lower your spending, you probably are paying too much for housing and may need to downgrade. Especially recently with interest rates rising, those who got into a house with a variable-rate mortgage may not be able to meet the inflated monthly payments. They become “house poor,” barely able or unable to meet all their needs and none of their wants. Of course, it ends up being a values issue, but I personally would rather downgrade my housing to be able to have more of my other wants.

Dealing with finances is certainly not easy, especially as a couple. The good news is, once you take all of your finances “out of the closet,” at least you’ll know what you’re dealing with and can make intelligent decisions from there. It’s better to know the stark, sometimes harsh truth than to live in ignorance, hoping or inaccurately assuming you’re on track to meet your financial goals.

What have been your experiences uncovering and reorganizing the “deep mess” of your personal finances? How did it turn out?


Posted in Budget, Budgeting, Budgets, Finance, Finances, Money, Personal Finance | 2 Comments »

2 Comments to “Personal finances can be a “deep mess””

  1. Solo Business Marketing Says:

    Review, decide, and cut. That’s what I do before finances get out of control.

    Maintaining household and business expenses on separate software systems has been incredibly beneficial. I hope to never be in a financial bind, but money problems are just around the corner if your home must be renovated and you’re not ready for the expense.

    Meanwhile, I have a clear idea of what expenses I have and how money is allocated to pay for it. That let’s me make smart decisions whenever it’s time to assess a new or replacement service (cable, telephone, etc.).

    It’s not easy to start and stay on track, but making sure that you live within your means 99 percent of the time lets you sleep a whole lot sounder.

  2. Getting Finances Done » How to become a personal finance “black belt” Says:

    [...] Despite your lack of financial control, you have a strong resolve to take action even though the thought of facing the “deep mess” of your finances seems overwhelming. You and your spouse have agreed to work together. In an effort to get your spending under control, you’ve started using cash for your “out-of-control” budget categories. You’ve stopped using credit cards somewhat reluctantly and possibly out of the sheer pain of your dire financial straights. Despite some complaining, your family has agreed to use cash as well. You’ve taken initial steps to figure out what your basic monthly income and expenses are and have tried budgeting for at least one month even though it doesn’t match reality yet. [...]

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