Basic budgeting can help you work wonders
Living by sound biblical principles should touch all areas of our lives, including meeting and managing personal financial goals. For some, the discipline of budgeting is not new, and many have already embraced God’s desire for people to be good stewards of their money.
However many of us know we are not where we should be. We know we require help to better manage our personal finances. According to the Bible, “Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty” (Proverbs 21:5).
It takes planning, hard work and discipline to start budgeting. But once you establish a good routine, you’ll start seeing results. Your worries about money will ease, and your work will be worth the effort. Imagine the satisfaction you’ll feel when you meet your goals! Maybe you want to grow your savings, perhaps you want to contribute more to your church, or stop struggling with debt. With discipline, you’ll see results and get off to a fresh financial start.
A budget is an important tool that can help you:
- Track where your money comes from and goes
- Achieve your goals
- Take advantage of opportunities—when you are in control of your finances, you can act quickly on special opportunities to give, save or invest;
- Have peace of mind and give you more time and energy for the other things that matter;
- Be a good steward of God’s gifts.
Trying to set and follow a budget without a clear picture of your current spending habits may cause frustration. If you have trouble making ends meet each month, here are some simple steps to create a budget:
- List your available monthly income from all sources (after taxes and other deductions).
- Track your spending for a few months. Carry a notebook with you, create a computer spreadsheet or collect receipts for every dollar you spend. Remember to record little things; coffee on the way to work adds up. Divide your spending into categories—e.g. rent, groceries, transportation, entertainment, clothes, invest- ing, dining out, tithing, etc. Include annual expenses in your tracking, such as property taxes or holiday spending.
- Build a budget that works for you. Think first about your goals. Then think the spending habits that may be standing in your way. If you want to increase your savings, start by paying yourself first. Set up a pre-authorized transfer to an investment or savings account.
If your challenge is to curb impulse credit card spending, don’t carry your cards with you. Pay only with cash. Keep an envelope or jar with your weekly spending allowance for each budget area and stick to it. If you have money left at the end of the month, save it in an emergency fund for unexpected expenses.
When you examine your spending, you may find obvious habits to change. Often something like limiting your dining out will make a huge difference to your savings.
Change can be very challenging. But keeping a specific goal in mind makes it easier to be disciplined.