Okay, so I want to be real here. It’s all well and good to sit here and talk about all the things we all know we should do, put money in savings, eat out less, pay off debt… blah blah blah. That’s all well and good, except that sometimes it’s easy to get lost in the big crazy list of all those things we should be doing, it’s easy to get stuck and overwhelmed because we know we can’t do it all. So, here is the list I made for myself. I keep telling myself that as long as I make baby steps in each area, I’ll look back and everything will be so much better than when we started that I’ll be amazed. I’m not amazed yet, but it’s a lot better. So, here is the skinny.

First, give Murphy the finger and buy an umbrella. Bad things are going to happen and when it rains it pours ,so expect things to go from fine to falling apart at a moment’s notice. Cars need repairing, people fall and get hurt, jobs are lost…you get the point.  I probably don’t have to tell you, because it’s probably happened to you. If it hasn’t happened to you yet, take it from someone who has been totally unprepared when the bottom fell out of my life – you don’t want to go there, it is not a fun place to be. So, without becoming crazy paranoid, be prepared. Dave Ramsey says create a $1,000 emergency fund, then focus on debt. We are doing it a little differently, we focused on getting $1,000 in savings, then we’re not going to stop saving because that isn’t a whole lot. We want 3-6 months of income in the bank, then we’re going to focus on serious investing.

Aside from savings we set aside money for things like the unthinkable. Even though we were broke, when Autumn was born we got life insurance just in case. Later on when Logan was born we added riders for both kids in case something happened to them. For less then $10 a month, both kids are covered on our life insurance policies for $25,000 which would cover their funeral expenses, God forbid they should die. When I worked for State Farm, I saw a lot of tragedy, but the worst tragedies weren’t the ones where they were faced with innumerable loss. The worst losses were the ones that were sudden and the family was unprepared so they have to face loss as well as the financial burden of a funeral and final expenses.

Steps to Financial IndependenceNext, get rid of payments. Car payments, student loans, and credit cards are your enemy. I won’t rehash what a million other money management writers before me have said to try to prove a point. If you want some proof, read this article, this one and this one. Seriously, just do whatever it takes to dump your debt and you’ll be a lot less dependent on those paychecks and have a lot more money to spend each month. My motivating though is “What would we do if we lost two months of income?” and then I try to make it so that we could survive comfortably.

Have clear goals LINK. “If you aim for nothing, you’ll hit it every time.” Don’t let the everyday stuff distract you from where you want to go in life. If you have a 9-5 office job and dream of being self-employed then spend your evenings after the kids are in bed educating yourself and getting prepared financially. Keep the big picture in mind at all times!

Have multiple sources of income. When my ex-husband was working and I stayed home, him losing his job was nearly our financial ruin. Trust me on this one: it’s a lot easier to stretch money than to make it appear out of thin air. When I first became a single mom, I started doing freelance writing so I could eventually transition to working from home full time. Thankfully, when I had to leave my job I at least had a foundation to start from so I could keep the lights on and gas in the car. Without it, I could have easily been homeless in a matter of a few months.

Know how to succeed in your profession. Okay, this might seem like a given, but you’d be surprised how many people don’t take the time to improve when they aren’t required to. If you have free time at work, instead of wasting it and jumping on Facebook or trying to get three stars on all the Angry Birds levels, read up on things that will make you better at your job or do something that will make you eligible for a  better job.  If you’re a stay at home mom, then learn about better budgeting and frugal living. Money saved is money you can put toward those financial (like freelance work LINK )

Know what to do in months of plenty. I wrote a detailed plan about how to survive on an irregular income here, and there is a good reason why. There are tons of great guides that tell you how to survive the months when things are lean but few places give you a good idea of how to manage your money so when things are good, you can set yourself up for success, even when money is tight.