Budgeting

 

    To follow Jesus with integrity, we need to learn how to budget.  God has given us a lot.  We are the stewards of what God has given.  We need to make sure that we take care of it and leave something behind for the people that come after us.

    A budget is easy.  Living by the budget takes work.  It is a decision that needs to be applied in your personal financial statement, recording your income, and deed.  The personal financial statement is how you get a picture of your current financial situation.  You list what you think your value is in assets and liabilities.  You want your assets higher than your liability.  You will want to do this about once a year as a financial check up.

    Assets is the money in your bank account, savings, retirement, life insurance, coin collection, home equity, real estate equity, business income, automobile equity, and things you own of value.  Liabilities are credit card debt, auto debt, mortgage, personal loans, business loans, education loans, medical bills, and other loans.  

    I recommend creating an excel spreadsheet to record your budget monthly.  This is where you can record all your income and subtract all the bills and debt every month.  You see what you make and what you spend your money on.  A budget is good because it gives yourself boundaries on your spending, so you can have what you really want in life.

    It does not take much time once you get in the habit and maintain it.  Start with your gross income and then list beside it all the debts in order of what is not optional to optional: taxes, insurance, tithe, mortgage/rent, house maintenance, bills, groceries, eating out, car expenses, savings, retirement, and so one.  The under than list the days 1-31.  You can put what you spend everyday in the cell (day/item).  At the bottom it will total it for you and you see where you money goes every month.  

    I have a spreadsheet that works like a bank register.  At the end of the month I print it and use it to enter in the second spreadsheet listed above.  Once that is complete: bank statement, credit card statement and any other statement.  I print that and put it in the annual.  The annual has a column for every month.  Then a row for every item of spending.  The top is income, taxes, insurance, and tithe.  I total that and consider that my net income for what I can spend my money on.  It calculates my total for the year and average to help me create the following year's budget.

    Your budget needs to be personalized, user friendly for you, and something you can maintain.  It will change as your circumstances in life change.  However, no matter what it will give you more  control over your finances.  Your Mortgage should not be more than 25% of your net income.  That gives you 7% for utilities and maintenance.  Transportation should be about 10%.  Insurance should not be more than 5%.  You want about 10% for savings and retirement.  That leaves 43% for food, entertainment, clothes, debts, medical, and anything else in your life.

Proverbs 21:20-21, 22:7-8, 24:26-27, Matthew 6:31-34, Luke 12:14-15, & 1 Timothy 6:17-19