Habits

​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.