Financial Stage 1: Surviving

Are you in Financial Stage 1: Surviving?

The first stage of most people’s financial life is surviving. At this stage you likely don’t have a detailed budget or financial plan. You are most likely living paycheck to paycheck. You may have little, or no, cash in savings and you aren’t investing in a way that will cause you to be financially independent. You could be just starting out on your own or you could be twenty years into your working career. From my experience a larger portion of the population fits into this stage than one may think.

Goals in this Stage

If you choose to stabilize your financial life, your goals at this stage are centered around awareness and commitment.  At the start of this stage, you should become aware of where you are financially by calculating your personal net worth. This is your gut check. What do you own and what do you owe? Click here for how to calculate your net worth.

Once you are aware of where you are financially you need to commit. You must commit to stabilizing your financial life. If you aren’t fully committed, you will fail at maintaining financial stability. You must be honest with yourself about your level of commitment. Share your goal to become financially stable with people that you trust.  It’s not enough to just learn the skills we are going to talk about during the stages, you must be motivated.  What motivates you?

Identifying Your Motivation

Right now, I want you to take a full piece of paper and draw one line down the middle.  Label the left column “Stay the same” and under that list the ways that money makes you feel now.  Then under that list how you feel about your financial future.  Now list under those how your family is impacted by your financial state right now.  Now label the right column “Financially Independent” and under that list how you would feel if money were abundant in your life.  Then under that list all the things you would do with money if it were infinite to you.  Now list under those how your family would be impacted if all those things were true.  Now, circle which column you like most!  I’m guessing it’s the right column.   This would be a good piece of paper to keep for you to look at as you progress through the financial stages.


In this stage you will also need to develop a strong budget. See this page to learn how to make your budget. You will first look at your personal budget in terms of your outflow, next you will set priorities for extra income so you are planning ahead of time for that situation, then you will look at your budget in terms of your income, after that you consider your budget in terms of actual cash flow, and finally you will pull your budget all together.


At this stage, you should consider what it looks like to build generosity and giving into your financial plan. If you cannot pay your bills, I think you should consider whether you should give or not. Focus on stabilizing your financial life so you can be a cheerful giver versus giving from a position of guilt or obligation because that doesn’t serve anyone well over time. You can start developing the mindset of a generous person and I recommend you really consider that aspect of your financial plan, even if you can’t start being generous quite yet.

Moving to Stage 2

I believe you are ready to enter the next financial stage once you have calculated your personal net worth, developed your financial plan and budget, and you are working on a positive money mindset. That’s the great news, you could enter Stage 2 today!

One thought on “Financial Stage 1: Surviving

  1. Pingback: The Four Financial Stages of Your Life – Mile High Money Guy

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