Today on MoneyLife with Chuck Bentley

My guest today is Dave Scobey, National Seminar Director for Crown Financial Ministries. As you might expect, Dave's an expert on budgeting.

People are scared of budgets because they think of them as restrictive, putting yourself in a fence, capping your fun. That’s a reaction of the flesh.

The opposite is true for the spirit; a budget brings freedom. Dave will talk about the liberation that comes from a spending plan. A plan allows you to spend on purpose to accomplish your purpose.

The reason most people struggle with a budget is because they don’t plan for inevitable expenses. They put everything they want to do in the plan and leave no financial margin. An example is car repairs, if you don’t budget for them, when they happen, your budget will be busted.

Other things people commonly overlook in their budgets are:

• Insurance
• Taxes
• Clothing
• School supplies
• Pet care
• Gifts
• Minor medical expenses
• Vacations

Chuck: Dave, budgeting is a hot topic because of the recession. I think it's really the key to gaining financial margin.

Dave: My wife didn’t like the thought of a budget, but she’s now glad we got on a plan. We don’t have the financial stress many people do because our plan;s gotten us out of debt. We're actually able to save money while living on retirement.

Chuck: How can someone can stick to a budget?

Dave: Keep it simple. Don’t try to accumulate too much information at one time. If you get overwhelmed, you’ll be discouraged and stop.

Choose a system that fits you. Once you set it up, all you have to do is keep up with your receipts to track your expenses. Record those purchases every few days in the appropriate spending categories. It only takes minutes to enter if you’re disciplined about doing it regularly.

Then, review your budget balances weekly. At the end of the month, money left over in a category rolls over to the next month or you can use it to balance another account.

I recommend couples use a joint checking account. And it's important that decisions are based on the budget and not on the checking balance. The checking account balance can be deceiving and get you into trouble.

Everyone needs a budget, regardless of income level, and it's more important the less money you have. A budget is your tool for developing a surplus, and saving money.

When your income is low and you develop a budget, start by identifying essential expenses, such as food, clothing, and shelter. If you exhaust your income on those needs, you must increase your income, or get some assistance.

Most people even in this economy make enough money to meet their needs. Determine what time during the month you have to pay those expenses. Make a list of the expense and the time it's due. Take your income, and allocate it on paper to pay those bills. If a bill comes due that you don’t have the money to pay immediately, work out a plan with service provider to pay later in the month.

Anything that is not a need must be reduced or eliminated if necessary until you have financial margin. Financial margin should be used to build an emergency fund. Start with $1,000, increase to one month’s expenses, then three month’s expenses.

I once coached a couple at the end of a seminar I conducted, they were in debt due to a loss of income and continued spending. But when the wife recognized God’s ownership of their house and sovereignty, her stress level was greatly reduced even though her circumstances hadn’t changed.

Seminars are a great place to get started. An instructor will explain step-by-step how to become financially free. The instructor will answer questions and help participants apply Biblical principles to their finances.

People who go to the seminar are more likely to follow-through and take action. A Crown Journey to Financial Freedom seminar is usually eight hours. Some churches divide it into Friday night and Saturday morning, some do Saturday morning and afternoon sessions.

A Crown Money Map Coach can help you one-on-one online. For more information, call 800-722-1976.

Steps to Making a Budget

In making a budget, there are several steps, each requiring individual effort.

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Dealing with lay off is not pleasant, but look at the lay off as an opportunity that can be conquered.

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Such a Time as This

God has called each of us to a purpose greater than ourselves. Know that it will require death before life can be given to this purpose.

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Every Spending Decision is an Investing Decision

At its most basic, investing is making management decisions to give up the use of something now in order to have more of something later.

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Other Resources:

• ABCs of Money Package
• Career Direct
• God's Principles for Operating a Business
• Business By the Book
• Crown Mvelopes