Did you know that tracking your spending and creating a budget can be freeing and actually bring peace?
A budget empowers you to know exactly where your money is going and helps you reach your financial goals. When you use a budget, your money starts working for you, not the other way around. Contrary to popular opinion, it doesn’t limit your spending, it gives you freedom to spend…the right way.
The Bible is full of examples of the importance of planning. God gave His people a detailed plan for building the tabernacle, the ark, and the temple. He also gave detailed laws that the Israelites were to follow while living in the Promised Land. Jesus, in Luke 14, talks about how foolish a man is who wants to build a tower but doesn’t first sit down and count the costs, who does not make a plan.
A budget is simply a plan for how to spend the money we have. As Christians, we recognize that everything we have is a gift from God. We are not the owners; we are simply the managers of what He has entrusted to us. Knowing this should give us a better perspective on handling money. A budget is a great way to make sure we are being faithful.
Here are some simple steps to get you started:
For variable income, use an average of the past 6-12 months as your base income. If you want to take a more conservative route, work your budget off of the lowest month you’ve had in the last year and save any extra.
To get an accurate idea of how much you spend every month, track your purchases for 30 days. Use an app, check your bank account, save your receipts, and write down every dollar you spend.
Assign amounts to each category based off of your spending log.
Look at your income, look at your expenses, and compare. Your income – your expenses should = $0. Keep adjusting until it does.
TIP: have a miscellaneous category for those random expenses that come up and put any extra money in this category to get down to $0. We know that starting a budget can be a little overwhelming, so we put together the Easy Guide to a Budget You Love to make it easy for you.
Everyone likes to keep track of their budget a little differently – you can use apps, a spreadsheet, or envelopes. Find a system that works for you and stick with it.
Your budget should be your visual guide to how you spend your money and where you have freedom to spend. Set goals to work towards – the Money Map is a great guide to help you know which goals you should work to reach next. Keep revisiting your budget to adjust as you need (about every 6 months) to keep it accurate and meet your goals faster.
No matter what, remember that your budget will never work unless you work your budget. The saying, “those who fail to plan are planning to fail” definitely applies to the area of personal finance. Once you have one made, stick to it! Proverbs 16 says, “Commit to the Lord whatever you do, and he will establish your plans.”
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