In the Chrysalis stage a caterpillar creates a cocoon to protect itself as it transforms and prepares to emerge as a beautiful butterfly. In our financial transformation this is a time to digest and integrate the ideas, beliefs, and knowledge we ingested as a caterpillar!

This is a stage where we need to settle in and practice and grow. We need to use this phase create habits that support our new vision and transform our financial relationship. We can create a budget that supports our goals, implement automation to track our finances, and get the support we need to bring our vision and dreams to life.

What habit did I need to implement in the Chrysalis Stage?
In my financial transformation I crated a routine that included a number of financial habits but the #1 change I made was in how I structure my banking to support my budget!

Budget Allocation:
The first thing I did was setup my budget by major categories not just expenses and then I created separate bank accounts for each category!

My categories are:
• Necessities
• Personal Spending
• Joy
• Debt
• Savings

For my budget, I allocate a fixed percentage of my income to each category. Every person’s percentages look a little bit different but necessities and personal spending take up the largest portion and I like to see Joy, Debt and Savings each get 10% of monthly income.

I set up separate bank accounts for each of these categories to make sure I spend the money as outlined. When my direct deposit arrives it gets transferred into each of the separate accounts. All of my necessities are on auto debit so they are pulled out on time. My personal spending is things like gas for my car and groceries and kid activities.

Joy – Debt – Savings: Why do I allocate the same amount of income to each of these categories?
Allocating the same amount of money to savings as to debt is what breaks the debt cycle! If you use your income to aggressively pay down your debt and don’t save you won’t have cash on hand. Then, an unexpected expense comes up like a car repair or medical bill and you can’t pay it. So you, you charge it and you are right back into the cycle of paying off debt. If instead, you set aside an equal amount each month towards savings, when an unexpected expense came up you would be prepared to pay it off while sticking to your debt pay off plan! It is a win win!

I put the same amount to my joy account for the same reason! Joy is all about having fun and giving yourself a treat! If we are too aggressive with paying off debt and reducing our expenses, we can start to feel deprived. If we live like this for too long, we will eventually “cheat” on our financial diet. Instead, let’s make joy part of our everyday life. Let’s plan for it. Let’s enjoy it without guilt! You can use your joy funds for anything that feels great! Girls night out or a special date night. Maybe tickets to the theater or a concert you want to see. Maybe a spa day or other excursion. Think about what truly feels indulgent and spend the money on yourself guilt free! Savor it and enjoy it and repeat it next month! You will look forward to your budget!

Knowing I could use my joy account and save for vacation while still sorting out my debt and making changes in my necessities kept me from giving up!

We cannot skip through the work to the fantasy. Living your dreams is brought to life when you consistently make choices that bring your life in alignment with your values and your vision.

Don’t rush this stage – embrace where you are.

Dream of the butterfly but don’t race there. You will get there at exactly the right time!

If I can support you in your transformation, click here to book a call with me!


1 comment on “Cocoon to Transform!”

  1. very interesting! Good idea to save an equal amount as to pay off debt! Fun is just as important as paying off debt to keep on going in the long run.


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