You’ve probably never met anyone who didn’t want to achieve financial independence—I never have. Why then does it seem that so few people seem to achieve it? The answer probably lies in the way people manage their finances. Successful financial management is the way financial independence is achieved, but unfortunately, many people mismanage their finances. If you’re one of them, financial independence is mostly wishful thinking. What does financial mismanagement look like? You have no savings, and you’ve never been a saver You’re addicted to credit, and your debts have been growing for years You’re in a job or career that you aren’t suited for, but you see no way out Though you do well financially, generosity has never been your strong suit No matter how many times you’ve tried, you can’t work within a budget Though you live well, you’re technically bankrupt (liabilities exceed assets) You have little or no savings for retirement You’re carrying an out-sized house payment and foreclosure is more than a remote possibility Financial independence will be tough to come by if you’re dealing with even one of these issues, but typically if you have one you have others as well. It’s not at all hard to see why financial independence would be hard to come by. How can you go about changing the course of your future? 1. Acknowledge the mismanagement The first order of business is to stop viewing financial mismanagement as anything less than a problem—which is exactly what it will become if it isn’t corrected. Most of us know when we’re going astray, and one of the best forms of evidence is the amount of time spent denying it to be true. 2. Bring it before the Lord God knows what we won’t admit, and He’s greater than our problems, habits and attitudes. No matter how entrenched they are, if you’re walking in faith, you’re not walking alone. Pray deeply, and keep your eyes and ears open for answers—they’ll come. In Psalm 46:13 we read: God is our refuge and strength, an ever-present help in trouble. Therefore we will not fear, though the earth give way and the mountains fall into the heart of the sea, though its waters roar and foam and the mountains quake with their surging. Pray for discernment, openness, resolve, wise counsel, peace and provision—you’ll need them all. He rarely drops a solution to our problems in our laps, but He will give us the abilities we need to work it out ourselves. 3. Have a plan Whether you’ve been building excessive credit, living above your means, or not earning or saving enough money, you’ll need to have a plan of action. The plan will have to be specific, with monthly, weekly or even daily activities that will move you closer to your goal. And it will have to be written. You can set it up as a mission statement describing the ultimate goal, but you may also need to set up spreadsheets that will remind you what you need to do each day and also to enable you to track the steps that will get you there. 4. Consult with others Find others who you trust to give good advice and who can not only encourage you in your effort, but also hold you accountable. Accountability is important since financial mismanagement comes about precisely because it’s done in private. When you tell others what your situation is and what you intend to do about it, you’ll feel more compelled to follow through. 5. Put the power of forward motion to work for you You may not succeed every step of the way and you might even take as step back every now and again—and that’s OK. As long as you continue moving forward overall, you’ll get to your destination soon enough. With that in mind, resolve to do something each day that will move you forward. If you take a step back today, vow to take two steps forward tomorrow. You can move slowly, but do it relentlessly. 6. Take small steps Accomplishing a small, doable goal is far better than failing at an impossible one. You probably won’t save $1,000 in the first month if you’ve never saved money before, but you may be able to save $100 with little difficulty. You can increase it to $200 after a few months, which will be easier since you’ll already have the savings habit rolling. You’re trying to create new habits that will last a lifetime, and that’s best accomplished in small steps. 7. Be ready to move outside your comfort zone Comfort is a close ally of financial mismanagement because much of what we do in life is driven by the desire to avoid being uncomfortable. But that may be exactly what you’ll need to be in order to make constructive change. If you’ve been living beyond your means, cutting back on spending won’t feel good at all, especially in the early stages. Similarly, if you’re trying to get out of a career that isn’t working out for you, you’ll have to learn new skills or even return to school. None of that will feel comfortable, but it will be necessary to make the changes that you want. 8. Look past the obstacles Here’s where you can engage your imagination. Think deeply about the fact that you have no money saved—how bad does that feel? Now imagine that you have six months living expenses in your bank account— how good does that feel? One of the factors that makes financial mismanagement difficult to overcome is that we don’t know how it will feel if a problem didn’t exist. We might come to consider a problem to be permanent. The key is to develop the ability and habit of looking past the problem, not living in it. 9. Keep records of your progress and celebrate your victories You probably won’t accomplish your financial goals quickly, so it’s best that you have a series of short term goals that you can measure along the way. Keep track of the increases in your savings account or the decreases in your credit card balances. This is important because you’ll need to see progress. Though you may not see it in any given week or month, if you see it over the longer term you’ll be encouraged to keep moving toward the finish line. When you do achieve a short term goal, feel good about it and reward yourself for reaching it (in a way that doesn’t undo the goal you just reached in any way!) Change always feels most uncomfortable at the very beginning, but as you move forward it gets easier—and more rewarding. We all want financial independence, but it can never be attained if you’re dealing with chronic financial mismanagement. If you can turn those bad financial habits around, and get them working in your favor, financial independence will be just a matter of time. Which of these steps are you going to work on? Leave a comment below and let’s talk about it! Related Articles: Reaching Financial Goals: How To Appropriately Prioritize 3 Steps to Strengthen Your Emergency Fund Premarital Financial Counseling: Questions To Ask Set Your Financial Priorities and Accomplish More 4 Steps to Get Your Finances Under Control My Checklist To Financial Freedom How To Spend Unexpected Income: 3 Questions To Ask With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com , a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids. As a thank you for subscribing to our newsletter you can download our quick eBook ” 25 Ways To Save Money in 2011 ” for FREE! The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. 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Overcoming Financial Mismanagement: 9 Steps to Financial Freedom