Breaking Free from Financial Chaos: A Roadmap to Recovery

Money troubles can feel deeply personal and embarrassing, but the truth is that financial struggles are incredibly common, even among people who seem to have everything together. Drawing from my own journey of overcoming massive credit card debt and building substantial savings (which recently helped my family weather a season of reduced income), I'm breaking down the steps that transformed my relationship with money.

Financial recovery begins with brutal honesty. We dive deep into how to track every dollar spent, categorise your expenses and get crystal clear about where your money is actually going versus where you think it's going. This transparency often reveals surprising spending patterns you've never noticed before. The second vital step involves building a financial safety net before aggressively tackling debt. I explain why having even a small emergency fund is psychologically crucial for breaking the debt cycle and why high-interest debt should be your priority target once that safety net is established.

Perhaps most importantly, we explore how to cut expenses without feeling deprived. Using my practical 4D Filter (Delete, Delegate, Delay, or Do Differently), you'll learn how to evaluate each expense in your budget and find creative alternatives that still allow you to enjoy life while moving toward financial freedom. For instance, we discuss how my family still enjoys weekly pizza nights, just with a budget-friendly twist that saves us hundreds annually.

Whether you're struggling with overwhelming debt or simply wanting to optimize your financial health, these practical strategies work because they address both the numbers and the mindset behind money management. Ready to transform your financial future? The journey starts with a single step and today's episode gives you the roadmap for every step that follows.

Need more support? Join the She's Organised Hub for incredible resources, mini-courses, group coaching and a supportive community of women on a similar journey as you.

Chapters

• 0:18 Introduction to Beyond Organised
• 0:57 Getting Your Finances in Order
• 4:08 Three Key Areas for Financial Management
• 6:31 Building a Safety Net
• 10:43 Cutting Back the Smart Way
• 19:58 Creating a Financial Future

Transcript

Mel: 0:18

Welcome to Beyond Organised, the podcast that helps you simplify your life and amplify your purpose. I'm Mel Schenker, life coach, speaker, founder of She's Organised and, more importantly, a wife and mom of four little kids. If you've ever felt overwhelmed, like you're constantly juggling everything but never quite catching up, this is the place for you. Here we go beyond just the tidying up and creating systems. We're talking about real life strategies that bring order to your life, but also we talk about the things beyond the organising, the things that really matter, like the parenting relationships and so much more. So grab your coffee and let's dive in.

Mel: 1:00

This episode, I want to talk about finances and getting your finances in order Now. I will just give you a quick disclaimer. I am not a financial advisor and nothing in this episode is financial advice, so please speak to a qualified professional for tailored advice to do with your situation. This is simply what has worked for me and what I share with clients, and it's just giving you a starting point when it comes to budgeting. So how do we get your finances in order Now? You may have heard recently, in a previous episode, been talking about my business and how, financially, things are pretty tough right now. We've eaten through all our savings and we're starting to build it up again. And, as much as I hate not having a buffer, I've been in a position where I had the massive credit card debts I had really bad money management and we cleared all of them and we built our emergency funds and savings and all that stuff. And we've done that before. I know I can do it again and it's happening. We're moving forward again. It's just I knew that the season that I was in with not working with the baby, starting a business, all of that that we would be going backwards and it was all planned. Unfortunately, it was planned to go backwards but that's why we had the savings there and we still got through it and we still did everything we needed. And there's just no way I could have even started this business let alone get through and have time off with my baby and that if I wasn't good with managing money. So I've helped a number of women now with their budgets and getting forward.

Mel: 2:55

I know it's incredibly personal and it can be really attached to someone's identity and value when it comes to money and how they manage money. And I just want to start by saying if you're not great at managing money. You're really not alone. There is so many people out there that look like they've got their life together and are so bad with managing their money. And there's others that might be driving the old car and having really cheap meals, never eat out, all that kind of stuff that you think are doing really poorly and they're actually doing really well with money. So you just don't know. You don't know, looking at someone really, where their finances are at, and it is a pretty personal thing. But I want to, I guess, talk about it today and make it not so taboo, and there is plenty of great experts and stuff out there that can help with these things. But I'm really just going to put it in a nutshell the things that I find the most helpful to get you learning and moving forward with your money.

Mel: 4:08

Now there's three key areas that I'm going to cover here. So the first one is know where you're really at, to get a full view of your finances. Two is building a safety net. And three is cut back the smart way. So if we go through the first part knowing where you're really at this one was hard for me when I first started out with finances, as I've mentioned.

Mel: 4:36

I think even in the first episode or two it was because of money that really got me into the organizing side of things. To begin with, I wanted to learn how to manage money better and it took years to finally get on top of our money and to clear credit cards and debt and to finally be free. In that sense. It took a very long time, but we also were not looking too good and it wasn't anything that my husband did, it was pretty much all me. It was me not knowing how to manage money very well, making poor choices, impulse spending, all of that kind of stuff, and we've had some very difficult conversations over those early years because I was the problem, I was the main problem, and I also want to encourage a lot of you.

Mel: 5:27

You are with partners who are the problem. You are the ones that are pretty good at saving or doing things well with money, but you might have partners that really struggle with impulse spending or anything like that, and I want to encourage you, as someone who was that person, that they can change. They really can. They have to want it, but it is possible, and I did like a full 180, completely different when it comes to money. Now I still have my moments when I impulse, buy or things like that and, you know, snap back into reality. But it is possible to change and no matter where you're at or your partner or anything like that, it is possible.

Mel: 6:11

So the first point is know where you're at, so don't bury your head in the sand. Know your numbers, share where you're at with your partner as well. So if you're married, it is good to really be transparent, have joint accounts, things like that. But I know a lot of you do have your own separate accounts and it's really up to you how you want to manage your money. I do think it's better in relationship to have joint accounts, but even then, my husband and I we still have our own individual account that we put our own discretionary money into that I can spend on whatever I want and he can spend on whatever he wants. It's a very small allocation each week, but it is still ours and we can do what we like and I've gotten better at not spending it each week and actually saving up for some bigger things which I could tell you I would never have had a cent left at the end of the week. I used to be that bad. But anyway, it is possible, no matter how bad your numbers look right now, to get out of the bad situation, and if your numbers are looking good, then great, we can make it look even better. But I encourage you to go back through your bank statements, credit card statements, wherever you spend money even buy now, pay later all that kind of stuff Go through at least the last three months and have a look at every single expense that you've got Now.

Mel: 7:40

You could break it up into a number of different ways. You could have, like a fixed expense category, variable expense category. So the fixed you might have your rent or mortgage, insurances and subscriptions or anything like that, and then the variable category might have groceries, utilities, petrols, things that can change from month to month, and you can list it all out that way. So then you kind of know the things that you can either reduce or you might have to cut out completely, depending on whether it's fixed or variable. I have some categories.

Mel: 8:13

I may have touched on this in a previous episode. I'm struggling to remember now, but some of the main categories I include are housing and bills. Some of the main categories I include are housing and bills, education, food, health, lifestyle, transport, professional fees, that's all your loans and credit cards and stuff which thankfully I don't have a lot in that category and gifts and donations. So they're sort of my main categories for everything. So you can categorize like that and have subcategories, which I also do. So like under food, for example, I've got groceries, takeaway supplements and any like health things like that I've got actually under the food category because if I'm having like a meal replacement, it's kind of like the food rather than a health thing. So it's really up to you how you categorize and do everything.

Mel: 9:04

But it is important to track every cent. So even that $4 coffee that you bought one day when you were out at a place that you don't normally go to but you were just there for that day still track it down. So I have a spreadsheet that I have from Smart Women Society and it is fantastic their ultimate wealth dashboard, I think it's called so good value and you get so much out of it. I'm not an affiliate or anything like that. I really just love their spreadsheet. It is comprehensive but super simple and easy to use and they've got categories already in there so you could use that if you wanted to.

Mel: 9:49

I have found to be really helpful, particularly for those that are starting out and really need to have a clear overview of what you're spending, because you can set your budget, but you can also see what you are actually spending against that budget as well, and pretty graphs and all that kind of stuff as well. So I would encourage you to get ruthless, get real with your numbers and not leave anything out. Be really clear, and then you can see an average of what you're spending on things, and you might be spending money on something that you hadn't even accounted for, but when you look at it you go well, actually it is something I need for my mental health or whatever it is, and you don't want to cut it out, and that's totally fine. But then there might be other things. You're like I actually probably don't need that, that doesn't serve me, I don't care enough about it, I'm happy to let that go, and that's fine too. So we'll get to that part later anyway.

Mel: 10:43

But the next part is building a safety net. So do that before you start tackling any debt. So you need to work out how much money you've got coming in. So, whether it's from your job, from dividends, from investment properties and other investments, any government payments, whatever it is. Work out your income, all the money coming in, and then you also need to work out all your debts, all your liabilities and all your ongoing expenses, things working out which we started to cover some of those expenses with your food and health and all that kind of stuff previously. So you really need to get a clear view of money coming in, money coming out, but the number one thing you need to do is to stop adding to your debt.

Mel: 11:33

So from now on, we need to avoid using credit cards unless you're paying for them in full every month and you're really getting that value out of it. Paying for them in full every month and you're really getting that value out of it. Credit cards are not really a great thing to have. So I know some people. They are really disciplined with the credit cards and they're paying it off full every month and they're really maximizing the points and the benefits. That's fine if it's you, but if that's not, you then don't have a credit card.

Mel: 12:01

I knew that, in theory, what I needed to do, but then one month this is many years ago then one month, life got a bit hard and we couldn't pay it in full that month and then the next month and the next month and it got harder and harder to keep on top of and it was really, really stressful and I just didn't want it. I did not want it anymore and so I needed to stop adding to that debt, and I did. Now people say, cut it up, all that kind of stuff. I didn't feel comfortable cutting it up to begin with. I was scared, but I put it in a drawer and hid it. It was not in my wallet, it did not come out at the shops or anything like that. I did not use it anymore. I put a stop to it. So a lot of the time you can toggle things off online. Now you can switch it off, sort of lock it or things like that.

Mel: 12:50

So do that. Stop it from being used. Ideally, cancel it if you can. It can be really scary not having it to begin with, but it is important. It is important to stop adding to this debt.

Mel: 13:05

But before you start paying off that debt, before you even start paying off that credit card, now put in the minimum, put in what you need to. You do not want to wreck your ratings and scores and have debt collectors on your tail. Put in what you need to, but before doing any more than that, build up your emergency buffer, your emergency rainy day fund, whatever you call it. Build that up and kind of like with Dave Ramsey with his baby steps he talks about a lot of these. It's a pretty good method, but have a one to two K buffer in there to begin with with, and once you've got enough in there that you're comfortable, if the car breaks down or something goes wrong and unexpected, you can cover it without having to use a debt for it, then after that you can start paying down your debt.

Mel: 13:55

And you might as well start clearing your debt before you build any more savings. Just because generally the interest rates on credit cards could be 20%, some more, some less. Loans can be pretty high all of that as well and generally it's a lot higher than anything you would get from a savings account or from offsetting a mortgage or anything like that. So we want to try and clear the debt first, because it's costing you more than anything you can potentially save, and then, once you start doing that, we want to obviously clear down the debt and continue to build up your savings, and then we move from the savings into investments down the track after all, because just keeping your money in the bank you're still losing in the long run. So you do need to look at investments and all that down the track too, which that can be a whole nother rabbit hole in learning if you are not too familiar with it, but definitely worth you learning once you're at that stage.

Mel: 14:56

So I know that you're probably thinking, oh but Mal, you're not even in a very good financial position right now. And yeah, that's true. But could you imagine how much worse I would have been if I didn't have any savings at all? I would have needed to take out loans and debt. I honestly I could not have started this business. But I also know my family's life would have had to have drastically changed for me to get through that season. That even now that season is done and over and I'm back to work and things are moving on, that still would have impacted them now, like I would have had to pull the kids out of school and all this kind of stuff. That that has a long-term impact. So I'm glad that we had the savings there. That was the whole point, and it took a long time to have that and be able to use it. But we did. Now hopefully we can build it back up again and I know that. I know the plan, I know the steps, done it before we can do it again and we can slowly build it up and move forward from there.

Mel: 16:00

So the third one is cut back, but the smart way. You don't want to feel deprived. You don't want to cut out all the things that actually mean something to you and make you happy as well, like, yes, you've got to pay bills and you've got to cover the things that are necessary to keep a roof over your head and all of that. First, that's important, but you also want to have some luxuries in there for you. But you need to work out what that is and stick to the don't go. Oh, having a coffee is really important to me every day on the way to work, but then I also want to go out on a Friday night and I want to do this and have that, and then, before you realize it, you've spent hundreds of dollars every week on things for yourself. You have to be careful. If you're not in a position to be doing that right now because you need to get ahead financially, then you really need to be picking one or two cost-effective things that you can still have. That's still important to you. Maybe you can keep that coffee in, but maybe we don't go out every Friday night or buy those things online the moment we see it. There are many ways to be able to overcome that.

Mel: 17:07

So we need to look at your spending and ask where am I overspending, without even realizing the things that my money is going towards? That I didn't even notice, because maybe it's just a few dollars here or there, but it's really added up across the month. And that $3 here, $5 there. All of a sudden I'm hundreds of dollars down at the end of the month and I just didn't realize it was making such a big impact. And look at what's not serving you and that you're happy to let go of. So I mentioned that at the start. So what? What is actually in there? Maybe you're subscribed to something like a tv subscription thing and you only use it once a month and you're like well, actually I could probably let that go. And you only use it once a month and you're like well, actually I could probably let that go, and if I use it more down the track then I'll take it up then. So look what you're happy to let go of. But also I have the 4D filter you would have heard me say it plenty of times and you can use that for your expenses as well.

Mel: 18:08

So the first day is delete. So is there anything you can remove completely from this budget moving forward that you're happy to let go of? But there's possibly also a few things that you might be a bit reluctant to. But you know you need to to get out of this season. Then delete. Second one is delegate. Now that is going to be tricky for some people, but there might be some of you that've got adult children still living at home, got a partner who's maybe not contributing fairly it doesn't need to be equal, but fairly to some of the expenses if you keep them separate. So is there someone else that can pay or share the cost? But also, are there vouchers out there? Are there incentives or government schemes or anything like that that help pay for certain things you're just not aware of that you're entitled to. So delegate, see if someone else can pick up some of this cost.

Mel: 19:12

The third one is delay. Now, as much as we would all love to have the subscriptions to everything and the luxury lifestyle and all of that. If you are trying to get out of debt and you're trying to move forward and build up some savings, there's some things you're going to need to put off for now. It doesn't mean it's forever. It might mean waiting until your kids move out. It might just mean waiting until you go back to work after having your baby and finishing maternity leave. It could be any number of things and it could be a short wait, it could be a long wait, but look at what is adding to the pressure in the season and what can be pushed back, and you can wait for another time to help free up funds for now. And then the fourth one is do differently. So is there a cheaper or smarter way to go about things Now for me?

Mel: 20:05

My kids love pizza. I would eat it every night if they could, if I allowed them. Kids love pizza. I would eat it every night if they could, if I allowed them. But we have only bought proper takeaway pizza once this year and that was for an actual birthday event which costs an arm and a leg when you've got 20 other people over. But my kids love pizza and they will have it at least every fortnight, sometimes weekly. But we have the frozen pizzas from Woolies, which is the shop here in Australia. It's cheap stuff. I don't particularly like the taste of it but the kids love it and it's a fraction of the cost of buying freshly made pizza from a pizza shop. So there are different ways you can go about still being able to have pizza than finding a cheaper version. Or one that I love is getting the wraps and you get your tomato paste and you get all the ingredients and stuff and you chuck it all in there and you put it in the oven and you're like they're very thin, obviously, on a wrap, but that can be super cheap and a lot of fun too. So there's different ways to do the same thing or a similar thing that gets you through for the season, and it could be a matter of even meal prepping in advance, so you're not resorting to takeaway on those nights when you've worked later.

Mel: 21:23

Things are a bit out of control. You need a meal quickly and all that kind of stuff. So see what you can do. That can help free up some of these expenses, but you still don't necessarily miss out on life. Now I know that I've had to go through the budget lately and really pair things back here and we are having a lot more beans and rice than normal. But the funny thing is my kids love it because I make the chili con carne and they will eat it every single night if I can. My husband is over it. He does not like it. I don't mind it, but the kids love it and they think that they are getting the meal that they want.

Mel: 22:10

But the kids love it and they think that they are getting the meal that they want and really it's just a real budget-friendly meal at the moment. And so you might even look at things and go, okay, my kids really love spaghetti or they love these things. And yes, it might not be the healthiest option right now, but you also need to weigh up the balance of what they'll eat a bit of the health side of things, but also the budget. And if it can mean getting through and out of this season so you can then afford to have better meals down the track, then just see it as this season this time. It's not a forever thing, but it gets you through. You do what you got to do. You might even just add a salad to the side or make a few tweaks and adjustments to still make it as healthy as possible. But there is ways to eat healthy and on a budget, there's ways to be entertained on a budget. There's ways to go about education, housing, clothing, all these kind of things on a good budget.

Mel: 23:19

And when you're on a budget, it doesn't necessarily mean that you're poor or you've got no money. People that are wealthy have a budget of some sort. In fact, the people that are wealthy are usually the ones that started with nothing and, through smart choices with their money, built their way to wealth. But they know that a budget's important. You need to know what's coming in and what's going out, and that's pretty much the crux of it. So I hope that some of these tips and ideas have helped you get started. And even if you know all of these things, it's more reminding you that today is probably a good time to get started and review and move forward with the budget again if you have put that off for a while.

Mel: 24:05

But if you do need someone to talk to, you need maybe a bit of help going through your budget. Anything like that more than welcome to book in a session with me. Links are in the description. I've also got a number of resources and mini courses in that on budgeting and things like that inside the she's Organized hub. The details again are in the description for you and, yeah, there is so much in there that can help you moving forward as well, even to suit your current financial situation. It is pretty well priced considering the things you're going to learn, and you will end up saving a lot more money than what it's costing you to be in there. So that is also another thing to check out.

Mel: 24:50

But if you need anything more from me, you can reach me by email. You can send a text. The link is in the description. Everything is always in the description. I'm always saying to go to the description, but if you've got questions and you have a specific question you'd like to have on the show, please reach out and I'm more than happy to help you and have your questions on here and answer your questions as well. If you have anything more that you want to know on finances moving forward, I'm more than happy to create more episodes helping you with the financial pillar of living a more balanced life. If you loved this episode, don't forget to hit subscribe so you don't miss what's coming next. And if you want to continue the conversation, you can connect with me on Instagram at @shes. organised, or for some free resources, head over to beyondorganised. com/ toolkit. Remember, organising is a tool to live the purposeful life beyond it. See you next time.