Get in the habit

A few key steps can help you on the journey to making your financial dreams a reality.

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By Sarah Watts, photo by Mark Conlan

Money dreams come in all shapes and sizes.

Maybe you want to save for retirement or a first home. Or perhaps you need a new car or money to send your kids to camp. Or maybe you want to give even more to your favorite church or charity. Whether your goals are big or small, they all require adopting wise financial habits in order to achieve them. Doing so also can help you create a more content, confident and generous life.

Which financial habits should you cultivate? It depends on your needs and wants.

If you want to rein in spending …

“Income is important to how much we can grow financially, but spending habits are truly what dictate our future financial success,” says Ray Weiss, a Thrivent Financial professional based in Brenham, Texas. “Some of my members who make $35K have more financial freedom than some making $1 million, and it’s because those who make $1 million can’t always control their spending.”

To control spending, Weiss recommends a tried-and-true method: the envelope system. With the envelope system, clients take their discretionary money and categorize it, allotting a certain amount to every category and keeping each portion in separate envelopes. “If you have $100 a week for restaurants, put that $100 in an envelope, and when it’s gone, it’s gone. It works for entertainment or anything else in your budget.” Weiss says that some clients are more easily able to control cash than they are debit or credit cards.

Shad Connor, a Thrivent Financial professional in Fargo, North Dakota, recommends that people understand their cash flow rather than set a strict budget for themselves.

“I prefer to put together a cash flow statement,” Connor says, “just so people can take a look at what’s coming in versus what’s going out.” Rather than assigning a category for every dollar spent, cash flow statements act as financial audits to show people where their money is going.

“A cash flow statement can show you if your expenditures align with your goals,” he says. “If your spending doesn’t align with your goals, we can help you make other decisions.” Connor recommends using secure software that gives you a big-picture look into your finances – including net worth – at any point in time.

If you want to save money …

When it comes to saving money, Connor says, people tend to save whatever is left of their paychecks at the end of the month. But he suggests one easy way to save extra money: Do the opposite. “I think it’s a better option to have your paycheck go into a savings account or a money market account and pull out only what you need each month into checking,” he says. “People say they’ll save money if they have extra left over, but if it’s in a checking account, it usually gets spent.”

Another easy way to save? Automate. “You can automate bills, so why not savings?” Connor says. “On a monthly basis, make sure some of your money is going into a 401(k) or a Roth IRA so it’s out of sight, out of mind.” You can set up savings, bill pay and even charitable giving on an automated schedule.

If you want to create a road map …

Whatever your financial goals, have a coach or a guide, such as a financial professional, assist you in mapping out a strategy for success.

“Working with a financial professional helps people make the decision of where to go and what to do with their money,” Connor says. You can discuss your goals for retirement, education savings, charitable giving and more, to make sure your spending and saving habits are working toward them.

And though people can spend, save and budget without professional help, Connor says, “It helps to have people checking in on you to make sure you’re on track.”

There’s another bonus to establishing good habits for attaining your goals.

“I've found that when people take care of their financials, they often get to a life of surplus, and the majority of people want to do good things, like donate to churches or to advocacy programs,” Weiss says. “When they don’t have the shackles of debt strangling them, they can be more generous with their time and money. I don’t see that as often from people who are loaded with debt.”

Get help building healthy habits

If budgeting seems overwhelming, try simplifying. Thrivent Federal Credit Union’s BalanceWorks® system is a money management tool designed to make it easier to track your spending and build savings.

Here’s how the tool works:

  1. Money for fixed expenses (mortgage payments, car payments, insurance, etc.) is deposited to your Needs account.
  2. Money for variable expenses (clothes and entertainment, for example) goes to your Wants account.
  3. Your remaining monthly income goes directly into your Savings Account.
  4. Setting aside funds for church or charity becomes not only possible but easy when you build generosity into your budget through the Giving account.

Learn more about the BalanceWorks system at Thriventcu.com/balance.

How Thrivent can help

Looking to get your spending under control? Use Thrivent’s Balanced Spending worksheet to help you see where your money is going. Once you have a handle on it, you can build new spending habits to help meet your goals. Find the worksheet at Thrivent.com/money-matters.

Sarah Watts is a freelance writer and content strategist based in the Chicago suburbs.