Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’ – Luke 14:28-30
If your money is coming up short each month, the first thing you need to do is find out why. Where is your money going? Is it going where you think? Is it going places that you really didn’t intend? The way to find out is to set up a budget.
In simple terms, a budget is a tool to compare the amount of money that is coming in to the amount of money that is going out over a set period of time. Typically, that period of time should be monthly. More frequently is usually overkill and to wait longer than a month can make it harder to keep up with. The exception is if your income is sporadic. Then it might make sense to do it quarterly or even seasonally depending upon your situation.
From my experience, the key to successful budgeting is to start with your monthly take home pay adjusted for giving and savings. If you took my post on Deliberate Generosity to heart, you have already set up three accounts; one for living expenses, one for giving, and one for savings. You are already automatically moving 10% of your pay to your giving account and another 10% to your savings. So when you start your budget, you will start with your take home pay after these items. You want to pay God first (tithing/giving) and pay yourself second (savings). Now, everything left is yours to spend. Since you have already taken care of your giving and savings, you don’t need to have extra left over at the end of the month. You just want to make sure you aren’t in the negative.
In my case, when I first set up a budget over 20 yrs ago, I found out that I was spending far more on eating out than I intended. That was true last year also. The wife and I had to make a conscious decision to cut back on Chick-fil-a (I won’t even mention how much we were spending per month, it’s embarrassing). Knowing where your money is going allows you to adjust your spending habits if necessary and to set goals for improving your financial situation.
Have a question or comment? Can I pray for you? Contact me. Thanks for reading and God bless you.
Want more on this topic? Check out the Biblical Money Principles archives.