​Four budgeting habits we should all develop...

One: A habit of dreaming
That's right, dreaming! It's our dreaming that helps us know what goals we want to achieve. Take some time to envision your life 5, 10, even 20 years into the future. What do you want it to look like, smell like, feel like? Where do you want to be living? What car do you want to be driving? Who do you want to be part of your life? Dream it all up. If you are married, be sure to dream together. You might be surprised at what your partner is dreaming of. Once you have your dream in mind, convert them into goals and get to work.

Two: A habit of creating a budget
What is a budget? People often think budgets are negative and restricting - something that limits their fun. But a budget is simply telling your money where to go instead of wondering where it went. How it works: each time money comes in, you ask yourself, "what does this money need to do before I get paid again?" then give every dollar a job to do. The job titles are the categories/things you spend your money on like rent, food, insurance, and dining out. Once every dollar has a job, you are done creating your budget.

Three: A habit of sticking to your budget
Creating a budget is great, but sticking to it is how you really achieve success. So, how can you stick to your budget? The best way to know if you are on track with your budget is to track your spending. When money goes out, you track which category (money job) is being spent from. Doing this will allow you to know how much you have left for that category until you get paid again. There are times when we all forget an expense or sometime comes up we were not expecting and we overspend in a category. Though, we try to avoid it, sometimes, we may need to change our dollar's jobs - borrow from 

Four: A habit of paying off debt and staying debt-free
Use the snowball method to plan your debt pay-off. Make a list of all your debts - smallest to biggest. Then start at the top. Decided how much extra you can pay on that debt to pay it off as quickly as possible. Keep paying the minimum on all your other debts. Once you've got the first debt paid off, take all the money you had been paying towards your first debt and use it to pay extra on the next debt. Keep on snowballing and moving down your list. Why do we start with the smallest debt and not the one with the highest interest? Because it offers you a quick win, frees up cash fast,  and helps keep you motivated to keep going. Once you are out of debt, save up for future spending rather than borrowing again.

As you are navigating your own financial journey, remember HOPE!

It was budget meeting time again. Somehow, in the beginning of our marriage, it fell on me to be the manager of our money. I didn't think it would be all that difficult - just record what we've spent and balance the checkbook, right? Wrong! Each time my husband wanted to look at the books, I felt like Lucy when Ricky would tell her, "You've got some 'splainin' to do!" It felt like whatever was wrong with our finances was all my fault - after all, I was in charge of our finances. I should have told him not to spend when we didn't have money. I should have known we were close to going into overdraft... again!

Each time we met to talk about money, my heart would race, I'd start sweating like a pig, and have a major fight-or-flight response. It always turned into a fight - him asking where the money went and me trying to defend the spending. It wasn't like we were spending like crazy either. Diapers and food don't come cheap! I felt like he didn't understand the reality of how much things cost; and he felt like I didn't understand how to not splurge on every "shiny" thing I saw. I had had it. He had had it. We needed to do something!

We had tried so many different ways of tracking our spending and budgeting, but nothing seemed to work. With two young children and a third on the way, a mortgage, car debt, and student loan debt to worry about, we didn't have much hope in our situation. It wasn't until we discovered the secret to finding financial hope that we finally began to communicate about money - not just argue. We began to see our money grow and not go into overdraft month after month. We were no longer living paycheck to paycheck. We finally had a plan and we were sticking to it. It can happen for you too! Just remember H.O.P.E.!

H.O.P.E. = Habits, Opportunity, Planning, Endurance

HABITS - Start developing good budgeting habits. Make a plan for your money when it comes in. Ask yourself, "what does this money need to do before I get paid again?" Then, develop the habit of checking the budget before spending.

Opportunity - Take advantage of opportunities to increase your income if needed. Weigh the opportunity costs. If you spend your money on something, you lose the chance to spend it on something else. Spend with intention.

PLANNING - Plan for the future by having an emergency fund stashed away to cover all those unexpected emergencies that come up. Don't forget to include your "true expenses" in your budget -- those things you know are coming up that you'll need to fund. Be sure you are adequately covered by having good health, auto, home/renters, and life insurance as part of your overall plan.

ENDURANCE - Keep going! If you’re just getting started, your budget will take a few months before you get most of the kinks worked out. It’s ok. Keep at it. After a few months, you’ll get to the point where you stop forgetting all those little expenses you never thought of. If you're further along in your journey, but you keep hitting roadblocks rather than milestones, hang in there. Keep doing the work and you will achieve your financial dreams!


Go on! Feel the hope!

P.S. Watch for future posts where I will break down each of these aspects of a winning financial plan.