Thursday, April 16, 2009

Thrifty Thursday ~ Budget

The Bible is full of wisdom about our finances. In fact, of Jesus' 39 parables, over half of them use money or work as a teaching tool. For the next few weeks the Thrifty Thursday post will discuss different areas of our finances (Budget, Tithe, Debt, Savings, etc). I'll share my very simple and practical ways to make sure we're honoring God.

For many years the word "budget" invoked fear. I felt overwhelmed and didn't know where to begin. It was only when I became a stay-at-home mom and was forced to budget that I realized the value and freedom it brings.

Luke 14:28-30 For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish.

To create a budget you must make the time (sit down) to write everything down (count the cost). If you're married, I suggest you do this with your partner. Click here to access our monthly budget. My goal was to keep it simple so we would actually use it. Here are a few key points:

  • The first page of the document is the weekly detailed budget. The second page is the monthly totals from the first page.
  • A few of our expenses (retirement, insurance, etc) are deducted automatically from my husband's paycheck. Therefore, I don't include those items as an expense and instead enter his income after those things are deducted. Again, trying to keep things simple.
  • Our mortgage is due on the 1st of each month. Therefore, I contacted each company of our other expenses and asked if we could change the due date to the middle/end of the month. The majority of the companies were able to accommodate my request! (The exceptions were my gym membership and preschool because the due dates are the same for everyone). By doing this you are able to control your cash flow to make things more manageable.
  • Budget for the bills that vary due to usage (gas, electric, water, etc) by getting an average. Simply write down your last 12 payments, add them up (total), and divide by 12 (months) to get the average. If you don't know your last 12 payments then contact the company to ask the amounts.
  • You MUST budget for the variable items (Fuel, Groceries/Toiletries, Miscellaneous, Entertainment). Click here for the Variable Budget document. Click here to read my RWAV post on how to use this document. I will go into even greater detail in the weeks to come.
  • Don't include a bonus or gift in your budget. This category is included to track when this blessing happens throughout the year, not to include as anticipated income. Ideally, when you get a bonus or gift, it should go directly to savings.
  • Your goal is to have a "zero" for your unallocated surplus. This means that every cent has a purpose and goes somewhere.

Philippians 4:11 I have learned to be content whatever the circumstances.

Accept the numbers. The best budget is an honest budget! Don't write things down that you hope will happen or you wish were the expense. This is more common than you think. Remember, we're taking it one step at a time. Join me in gathering the facts. Next, we'll discuss what to do if things don't look the way you had hoped.


HPS said...

R, This is EXCELLENT. I'm so glad you're doing this series. I know it will be very helpful for so many that, like you said, just don't know where to start. Thank you.

Tami said...

so funny that I stumbled onto your blog today! Just this morning my husband and I were discussing the flaws of our budget system and what we can do to improve it. 22 years ago it would have been an argument. Today it was a bonding moment...working through our strengths and weaknesses to improve unity. I LOVE watching God work in every detail of our lives.

Carolina Clipper said...

Tami~ Welcome, we're so glad you found us! I hope some of this information will help you with your family budget.