I hate the word budget. It’s not that financial tracking isn’t appealing or even easy to me, it’s just that word. budget. budge-it. bud-git. bu-dgit. budget. ew. It’s just about as bad as the word frugal. Don’t get me wrong; I do love tracking my spending, being in charge of my money and great deals. I’m not a fan though, of these overused words that carry negative connotations that are associated with lack. I don’t know about you, but when it comes to my money, I like to think through a lens of abundance and excitement, not scarcity or shame.
1. Get a Clear View of How You’re Currently Spending
Open up a Google Doc in one tab, open up your bank statements in another. You’re going to consolidate every purchase or bill payment into one document. Assign each account a color and highlight every purchase/payment with the corresponding color. This puts all your monthly payments into one place for easy tracking. Do this for the last 3 months so you can average out what you’re spending on fluctuating purchases/payments.
Here’s what I did: I made my bank account orange, one credit card blue, and the other green. Let me tell you, it feels so good to be able to see every transaction on one simple document. Remember, you’re not creating a budget, you’re simply tracking the way you’re already spending your money. The worst waste of time is to create a budget or spending plan that is a complete work of fiction and completely unrealistic.
2. Create a Visual Guide of Your Monthly Finances
Once you’ve done this, you can start adding up some totals and see how much you’re spending in different areas – necessary bills, entertainment, groceries and take out, gas, subscriptions you’re not actually using. At this point, if you haven’t yet included your income into the equation, add that in to your document.
Here’s the important piece of “budgeting.” Take your total monthly income and subtract your total monthly spending. If the number is positive: congratulations, you’re living within your means and can now shift your focus on building wealth! If your number is negative, you have 2 options: spend less, or make more money.
3. Plan Your Debt Payoff/ Build Your Luxury Fund
Once you’re living within your means, meaning you’re spending less than your income, you can start your plan to dig out of debt or build your savings.
I’m a fan of rolling debt – this is like when you regularly use a credit card and you consistently pay it off in full. The dangerous debt is the kind that isn’t useful, is a stress to pay off, and you can’t seem to make a lasting dent in it.
Decide how much of your excess monthly income will go towards paying down your debts/savings. Make a consistent payment every single month (or more frequently). What I did was add up how much money we are consistently spending on each credit card, and I averaged that out to each week. I make a weekly payment since we are paid each week for our primary income.
If you don’t have debts to pay off, build that luxury fund! Luxury Fund is the term I use to describe what most would call an “emergency savings.” I don’t like that term either – it infers that I’m planning to have emergencies in my future, I’d rather plan on luxuries. Now, don’t get me wrong, having the money to cover unexpected bills or time off work, or the money to replace a car or major appliance you didn’t expect to replace, that’s all a luxury to me. Luxury is financial security just as much as it is a bougie vacation away or a new sofa.
4. Keep it Consistent & Make it a Party
This piece is key to actually making sure you stick with your plans. Make it a super fun ritual. I sit with my bank accounts, pay my bills, and move money into that luxury fund every Friday morning when we get paid from our main source of income. I sit at the kitchen counter with my coffee, play some music, and let myself dream of what my wealth will blossom into.
Don’t be afraid to romanticize this experience. I put it in my weekly plans as my “Financial Planning Party.” Sometimes I invite my husband in when decisions need to be made, but most of the time it’s all so straight forward I just update him on how much growth we’re seeing in the luxury fund or send him a text at work to celebrate keeping the grocery spending under $1000 for the month – which is an incredible feat, in my opinion, for a family of 5 living in Portland, Oregon.
This is also a great time to reassess where you are in your spending and set new goals – like lowering grocery spending. Don’t be afraid to start looking into growing wealth or protecting assets, too.
5. Protect Yourself & Begin Building Wealth
This is a new chapter for my family. I was lucky enough to meet an incredible woman a year and a half ago who’s mission it is to increase financial literacy for women (see her guest podcast episode here – 87: Money Management, Financial Freedom & Empowered Motherhood with Dr Raquel Muller). Raquel taught me the importance of having life insurance to protect my family – it was something we continues to procrastinate on until she called me up and walked me through the process (which she will totally do for you, as well, free of charge!)
Here’s what we did to protect ourselves while building wealth: My husband and I opened up whole life insurance accounts for my husband and I, and universal life insurance for each of our kids. For less than $500 per month, we’re covered in the event of death, while making payments towards a secondary retirement account and our kids will have access to their accounts when they turn 18, which they can use for college, trade school, starting a business, or an early start to building their own retirements. This is the kind of head start on building generational wealth that my husband and I could only imagine growing up.
Do your own research on how to begin protecting your family financially, or get in touch with my friend, Dr Raquel Muller and get that one on one assistance.
6. Educate Yourself on Financial Lingo & Make Bold Decisions
For too long, money has been dominated by the males of our species. Yes, money is a masculine energy, but who’s best at controlling men? Women. It’s time we stop being sissies about financial decisions. Money is for women, too.
Did you know, women are actually better at investing money that men are? Here’s an article from Forbes if you don’t believe me: Why Women Are Better (Investors) Than Men.
Money was such a taboo subject growing up, and for too long women weren’t allowed to have their own finances – which I honestly do think is imprinted in our DNA, giving us money anxiety where we can’t seem to define it’s source. It’s okay to have money, it’s okay to take risks, it’s okay to ask questions until you understand how money really works in our economy.
I believe firmly that family finances are a woman’s responsibility. By nature, we are designed to multiply. In the Bible, that epic example of a woman, the Proverbs 31 Woman deals in the finances. It’s written in our DNA, just as much as the money traumas of the more recent past are.
It’s time to fearlessly educate yourself in the financial world. Here’s a few places to start:
- Dow Janes
- Ellevest
- How Money Works for Women
- Bolder Money
- Women’s Money Matters
- Savvy Ladies
- Clever Girl Finance
- WILMA leadership & lifestyle
Binge these Podcast Episodes for More!
153 | What’s actually keeping you from a life you love? – Meant to Bloom: personal growth for hot mess moms
148 | You can take one step back & still be moving forward with consistency – Meant to Bloom: personal growth for hot mess moms
102 | Actual Money Saving Tips to Cut Your Grocery Bill – Meant to Bloom: personal growth for hot mess moms
95: How I Changed My Mind About Money & What Happened When I Ditched My Budget – Meant to Bloom: personal growth for hot mess moms
