Be Wise with Money | Financial Guidance - Get in the · 2018-08-20 · 10 | Thrivent September 2018 Thrivent.com Thrivent.com September 2018 Thrivent | 11 A few key steps can help

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

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

By Sarah Watts | Illustrations by Mark Conlan

HabitGet in the

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Setting aside funds for church or charity becomes not only possible but easy when you build generosity into your budget through the Giving account.4

Your remaining monthly income goes directly into your Savings Account.3

Money for variable expenses (clothes and entertainment, for example) goes to your Wants account.2

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:

IN YOUR WORDSThrivent members share their advice on how to create strong financial habits:

“Learn to identify wants versus needs, and use debt wisely. The more a necessity costs, the more time should be spent researching the most cost-effective solution. For example, a vehicle is relatively expensive but often needed. Spend a lot of time looking for the right one at the right price.” —Bill Leggett

“Have a monthly budget you stick to, and take out your tithe first thing when you receive the income.” —Connie V. Bond

“My wife and I have always tried to share at least 10 percent of our income with our church and to help organizations. And we have tried to save 10 percent or more of our income. That leaves around 80 percent of our income to live on, and it has worked very well for us!” —G. John Larson

“The best advice I have gotten is to wait. I am a retiree now, and the strategy of finding an investment I trust and sticking with it has worked out for me. I never try to ‘time’ the market but rely on advice from those who know much more about finance than I do.” —Dan Canfield

The members’ experiences may not be representative of the experience of other clients. This story is for educational purposes only and is not indicative of future performance or success.

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.” n

Sarah Watts is a freelance writer and content

strategist based in the Chicago suburbs.

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.

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

Deposit and lending services are offered by Thrivent Federal Credit Union, a member-owned not-for-profit financial cooperative that is federally insured by the National Credit Union Administration and doing business in accordance with the Federal Fair Lending Laws. Must qualify for membership. Insurance, securities, investment advisory and trust and investment management accounts and services offered by Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, or its affiliates are not deposits or obligations of Thrivent Federal Credit Union, are not guaranteed by Thrivent Federal Credit Union or any bank, are not insured by the NCUA, FDIC or any other federal government agency, and involve investment risk, including possible loss of the principal amount invested.

Money for fixed expenses (mortgage payments, car payments, insurance, etc.) is deposited to your Needs account.1