It’s not easy to properly manage your money, but nothing worth doing is easy. There is a pretty simple first step, though: budgeting.
You can’t get your finances in order if you don’t know where your money is going, so a budget helps you determine where your money is going and where it should go.You may need to figure out where your money is already going before you can make a decision for how much to budget in some categories, so an actual first step might be to keep ALL of your receipts for a month or two, but this can be cumbersome and annoying. My advice would be to make a good estimate when starting the budget and keep in mind that your budget is flexible. It shouldn’t be flexible in the sense that you can still spend your money willy nilly, but rather that it is flexible in the sense that after you’ve gone 2 weeks or a month using the budget and have found that there needs to be changes, you can confer with God and your spouse (if you have one) and make changes to the budget and try to live strictly by it for next pay period or 2.
Why Budget?
The question in that heading is two-fold: “Why am I discussing budgeting on this blog?” and “Why should you budget?” A partial answer to both questions is found in the same place: the Bible. We try to have a biblical message with every post we have, and the Bible talks a lot about money. In fact, it is one of the most talked about topics in the Bible. God knew that money was something that would tempt us a lot and would be important in our everyday life, so he made sure we had plenty of useful material to read up on regarding it. OpenBible has 100 verses about budgeting, or rather about money and/or planning, and some pertain much more directly than others.
The second half of the answer to the first question is “It matters a lot to us.” When Kaylin and I went through premarital counseling, they taught us a lot about managing money, and it was definitely one of the best lessons we learned. We haven’t been the best at sticking to the budget (that’s mostly my fault, Kaylin’s pretty good at it, or at least better at making sure to discuss making purchases that weren’t covered in the budget), but it has kept us from going too far off course and it has been a starting point for discussing every major purchase. With the budget in place we were able to know if we could afford something, or how we could shift the budget around temporarily in order to save up for something relatively quickly. With a budget in place, you take away a lot of potential arguments, so you can even view it as something to help your marriage. 🙂
The second half of the answer to the second question was sorta answered in the previous paragraph, but honestly the answer is that planning is important. If you fail to plan, you plan to fail, and that is especially true with finances. The Bible talks a lot about wisdom and planning, especially in the book of Proverbs, but certainly elsewhere as well, and many of those verses pertain to money. God calls us to give generously and sacrificially, but we can’t do that if all our money disappears to who-knows-where before we get a chance.
Getting Started with Budgeting
So we’ve established that you should definitely make a budget. (Yes we have. Don’t talk yourself out of it. It’s important.) The first thing we’ll need is a budget worksheet where we can write down everything. You could just write one out in a notebook, but having an established one will help you be more organized and may have some spending categories on it that you would forget. Freddie Mac has a really expansive budget worksheet, but you may want something a little simpler, like this budget worksheet from Printable Crush. I’m working on my own worksheets to give away on the site as well, but they’re not ready yet. I’ll have a simple one for free, but I’ll also be creating an Excel spreadsheet to sell that does a lot of the math for you, preventing you from spending more money than you have. I’ll also include video tutorials and such to make sure you can get the most out of it.
Once you’ve got a worksheet, you’ll need to write down how much money you get paid and then you’ll generally try to establish how much money you spend (or want to spend) each month for each category. If you get paid every 2 weeks or twice per month, it may be easier to make it a bi-weekly or semi-monthly budget worksheet, but generally it is advised to make the budget on a per-month basis, for a few reasons:
- Most bills are monthly
- A month is a large enough span of time that it eliminates much of the “spikes” that come about from unexpected expenses
- It is a short enough span of time that you can see the end of it and not feel overwhelmed by how long you need to stick to the budget before being able to make a change to it
There are some things that you don’t pay for very often: license plate renewals, some insurance payments, school fees, many online services that give discounts for paying a yearly subscription fee over a monthly one, Christmas and/or birthday gifts, car maintenance and repairs, etc. For these, you’ll want to figure out how much you spend on them per year and divide that by 12, so you can save up for them throughout the year.
Do not forget to give a portion to the Lord! Some people are strict about 10%, others say a person should give what he has “decided in his heart to give,” and I personally say that 10% should be the minimum. 10% really isn’t that much, especially considering how much of that money was God’s in the first place (all of it). That’s more of a discussion for another day, but for right now, keep in mind that God says to give of your first fruits, so don’t wait until you’ve budgeted everything else out first and then give what is left over.
Also, don’t forget to save money! Saving is important. Besides being able to save up for larger purchases that you can’t fit into one month’s budget, there will likely be a large portion of your life where you are too old to work, so you’ll need to provide that income for yourself right now (it’s called retirement in case you couldn’t guess 😛 ).
Now that you’ve figured how much you want to give, save, and spend, add that all up and hopefully it’ll be less than or equal to your income. If it’s greater than your income, then you have some work to do to trim down your expenses. If your income is greater, then congratulations, you now have something called “margin”. It’s the cushion that allows you to be prepared for the unexpected. If you can, try to make some margin in your budget and set it aside so that you don’t spend it and so you won’t get blindsided when your van’s transmission decides to fall apart.
Conclusion
That’s about all there is to it. Each Friday we’ll be bring you more financial advice from the Bible, so we’ll expand on what we’ve learned today and talk about how you can apply your budget to your life to pay off debt and be more generous with your giving. Also keep an eye out for our own budget worksheets! God bless you in your financial and spiritual undertakings!
