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How to do a financial habit reset

HomemakingKim BrushComment

Finances. Money. Budget. Sigh. This topic falls closest to a resolution as I’m going to get this year. Honestly we fell down on the job of keeping track of our finances and we needed a reboot for this year. Can I get an amen? Surely we weren’t the only ones.

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How to do a financial habit reset

Husband and I just got busy last year with life and left it up to the other person to handle things and that meant neither of us was keeping track of anything. We paid our bills but we definitely weren’t tracking our spending and that always leads to not saving and more overspending. We feel this isn’t being faithful with what God gives us and know know know that we should be doing better. So we started out January with a financial habit reset.

How to do a financial habit reset

Getting on the same page

As we started to look ahead to the new year in December, we both were convicted about keeping current on with our money situation. For several years we have used YNAB (You Need A Budget) as our budgeting program and LOVE it! However, as a couple, we were not on the same page about tracking where our money was going and that was our hangup was in 2018.

We did a reset on January 1 and archived 2018. This was so freeing to me because when I looked back at 2018 I felt like I should go back and “fix” it all.

Resetting gave us a clean slate. Mistakes that had been made were in the past and we left it there. No blame just intentions to change how we handle things in the future. The next step was to take an afternoon and look at what money was in our accounts and make a plan for where we want to be at the end of 2019.

How to do a financial habit reset

Benefits of a budget

We have always had a monthly budget. Years ago when we had VERY little extra we lived with the cash envelope system. If you need to get a handle on your spending I recommend that you look into this method. We found that spending cash is much harder than using a card and it helped us to not go in to debt when there was only enough to feed our family and pay all the bills.

We no longer withdraw the cash for the month and use it for groceries, household stuff and eating out but I KNOW that because we did that for so many years I am a better spender now.

How to do a financial habit reset

Budgeting takes the emotion out of spending. When there is a purchase to be made we check the budget. If there is money in the category then we can do it, if not then we wait or rearrange some funds to make it happen.

When you keep track of your money it can help with your financial plan and relationships within your family! It doesn’t have to be complicated. A spreadsheet, envelopes, budgeting program—it all works!

Steps in our financial plan

1. Pay off several big bills now instead of holding on to the money so we can see our true financial picture. We like having the money in the bank but it was deceiving because we also had some big bills we were paying on each month. To have a clear picture of the money available we went ahead and paid those bills (tuition, new carpet etc) since we had it available. That isn’t always the case but we were blessed to be able to do this. It means our savings is lower currently but we have a plan for that too.

2. Weekly (sometimes daily) update YNAB on our spending so we don’t fall behind or have mystery transactions that no one can identify. This is what makes me feel the most defeated when there is a Walmart or Target charge that I can’t categorize accurately. I end up guessing and feel like I’m robbing the grocery or household category to keep things checked off.

3. Give every dollar in our accounts a job so we know what we can spend. This seems like a small thing but when we know what the money is for and then we aren’t tempted to spend it without thinking.

4. Every month trim our spending so that we can build up our savings in each category and shoot for 3 months living expenses saved.

It was amazing how unified hubby and I felt after laying this all out there and talking through our steps and plan. This was a huge benefit of doing a financial reset.

How to do a financial habit reset

Remember that you DON’T have to do this on January 1. If you are in the middle of a mess, financially, set aside some time to talk with your spouse or family and lay out a play for the future.

It is freeing and helps everyone to move forward in a purposeful way!

Resources you might want to look into

Dave Ramsey’s Financial Peace University

YNAB (if you sign up we BOTH get a free month!!)

Crown Financial Ministries

How to do a financial habit rest #finances #money #budgeting

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