Taking Charge of Your Finances
I
often find myself thinking about how the world is incredibly influenced
by money. We serve a God who blesses His people financially; therefore,
as Christians we should be among the most influential people in the
world. How can I develop the finances that God has given me into a tool
that will influence others? What about my own personal financial goals
and expectations? How will I ever accomplish these goals or see these
expectations come to pass? Setting up a budget is one place to start.
First,
let's look at why we should budget. The primary reason is that we want
to be good stewards of what God has given us. The parable of the three
servants in Matthew 25 gives us a great picture of God’s expectation of
us regarding the things He has given us, which include money.
Budgeting can also help us live a comfortable lifestyle that is within
our means, and not overspend. We find in Romans 14:12 that every one
of us must give an account. Give an account of what? An account of
everything we did on earth, including what we did with our finances!
Finally, having a budget shows self-control, which is a fruit of the
Holy Spirit.
There are a number of BENEFITS of budgeting. Here are a few to whet your appetite and help motivate you to get started:
1. You will know where your money went.
If
you have ever said, “Man! Where did my paycheck go?!” you need a
budget. With a budget, you will know exactly where your money went.
You shouldn't excuse yourself from budgeting because you think, “I just
don’t have enough money.” You budget so that you do not waste the
money you have.
2. A budget can help you get out of debt and stay out of debt.
3. A budget will confirm that you are being a good steward over what God has given you.
If you don't know where your finances are going, how do you know you are doing what God wants you to do with your money?
4. You will be able spend your money on what you WANT to spend your money on.
Deborah Fowles, a financial planner, says, “You will be in control of your money, instead of money controlling you.”
5. You get a bigger picture of your own life.
You
can sacrifice the small stuff that you won’t remember anyway so you can
spend money on bigger things that you will remember and that will have
more significance to you.
Here are a few tips on how to get started:
1. First and foremost, start budgeting with the right attitude.
Many
people fail at budgeting because they see it as a negative and
restrictive activity that will keep them from doing or buying the
things they really want. We should view a budget as a means to achieve
our short- and long-term financial goals.
2.Track your spending for a month or two.
The
easiest way to do this is by buying a software program such as
Microsoft Money or Quicken. This tool will be well worth the
investment. If you do not want to buy the software then you should make
a simple spreadsheet, listing your major spending categories, and fill
it in at the end of every day—yes, you read that right: EVERY DAY. (A
notebook and pencil will work just as well but might be a little more
labor intensive.) HINT: You do
not need the newest version of the software. An older version will do
just fine and can be found online for a fraction of the price.
3. Balance your checking account.
You should keep a check register and record your spending as it happens.
4. After you have tracked your spending, write up a basic budget.
Here is one I found online: http://frugalliving.about.com/library/BuildABudgetWkst.pdf.
HINT: Be honest about your spending habits. Many people who create
their first budget tend to write down what they wish their spending
habits were, not what they actually are. Being honest about your
spending will make your new budget easier to keep. Also, keep
crunching the numbers until it works. Don’t get discouraged and don’t
give up! (This is one of the hardest parts of budgeting.)
5. Begin using cash for things.
Most
people who use their debit cards instead of cash overspend. Get
envelopes for major spending categories such as, groceries, household,
eating out, and giving—yes, you can even budget your giving! Then put
your budgeted amount of cash in each of the envelopes. (You can fill
your envelopes monthly or based on when you are paid—for example, every
week or every two weeks.) The point is that when the envelope is empty,
you are done buying. Spending cash will make you reconsider some
impulse purchases while you are browsing the isles at Wal-Mart or
Target.
6. Before going out shopping, make a list and stick to it.
Don’t
just make a list for grocery shopping or household items; make a list
when you are going out to buy clothes or gifts as well. Decide ahead
of time what you are going to buy and how much you are going to spend
on it. If you are tough on yourself and actually keep yourself within
the parameters you set up, this will save you lots of money.
7. Plan meals and look through sale papers.
By
planning meals, you will eat out less and make less last-minute dashes
to the store, which often leads to impulse buying. Look through sale
papers and plan your meals around what is on sale.
8. Do not go to the grocery store hungry.
(This needs no explanation, right?)
9. Work debt payoff into your plan.
Start by paying off your unsecured debt first. Unsecured debt is any
kind of debt where you can't easily sell the item that created the
debt, like credit cards and student loans. (Cars and houses are
secured debt.) Then use the rolling payment plan. Allocate the most
amount of money to your debt with the highest interest rate and pay the
minimum payment on all the rest of your debt. When you pay off the
first debt in full, roll what you were paying on the first debt and the
minimum payment you were paying on second payment into the next debt
you are going to tackle. You’ll be surprised at the progress you make!
(Keep in mind that when paying off credit cards, you have to stop using
them to get them paid off!)
10. Get a “budget partner.”
Just
like it is easier to stick to a diet or exercise plan if you have
someone you are doing it with, it is also easier to stick to a budget
if you have someone who is doing the same thing. You don’t necessarily
have to exchange your personal financial information. You can plan your
meals together and make lists together. You may even get to go shopping
together and then you can help keep each other on track at the store. A
partner can be a valuable person with whom to swap sale information as
well.
Finally,
don’t give up! The hardest part of budgeting is the initial setup.
After that, you should update your budget regularly so it works for
you. There are a ton of online resources with suggestions of how to set
up a budget and how to save money. Use them! They're FREE, and that is
good budgeting!
Written by Toni McCarty, the wife of Daniel McCarty, mother of three, and a certified public accountant.
|
|