The number one rule of finance that any professional will give you is this: manage your money, or your money will manage you!
A budget is your roadmap to financial success. And trying to navigate the twists and turns life will throw you without your map is not good stewardship of your blessings from God. In other words, living without a budget simply will not work.
A personal financial budget requires planning for the future. It is a coordination of your actual financial resources with how you are spending them, all with the goal of the implementation of wise stewardship. It will keep you on track in a disciplined way to embrace God’s principles of giving, receiving, and managing HIS resources that HE has allowed you to manage for HIM. We can all agree that God, after all, is the ultimate owner of all our resources, belongings, and talents.
“The earth is the LORD'S, and the fulness thereof; the world, and they that dwell therein.” Psalm 24:1 KJV
“But thou shalt remember the Lord thy God: for it is he that giveth thee power to get wealth, that he may establish his covenant which he sware unto thy fathers, as it is this day.” Deuteronomy 8:18 KJV
To begin the process of constructing a personal budget, three elements are required:
commitment to the process, communication with all involved, and setting goals for future success.
Commitment requires being willing to sacrifice. This means sacrifice of frivolous or superfluous spending, especially until all monthly bills are paid. Pay cash for large purchases, or be willing to save until you can pay cash. Sacrifice your pride to work with your creditors and explain your budget plans. Concentrate on one bill at a time to achieve success over time. Look at your monthly expenses for less expensive ways to do things. Be committed to overcome and be a saver.
Communication is a large component in preventing division in the family. The family must be able to discuss financial matters together openly and objectively, and then decide together on priorities of the budget. Never make large purchases without first talking it over thoroughly, and set a limit on what is considered “large purchases” that require consent from the other parties.
Setting Goals is crucial for getting a successful budget off the ground. Make a list of what the family wants and needs, and also what is important to the family. Be realistic and give priority to goals that benefit the whole family. The budget must be flexible and fit your family’s personality. Write the goals down in order of priority, short range to long range time wise. Families with young children will want to start savings for college, this is a long-term goal. Or, you may realize your refrigerator is on its last leg and will need replaced in the next 6 months, this is a short-term goal. Remember to write your goals down, as statistics show that very simple, assessable, and clearly written financial goals will produce desired results 97% more often than unwritten ones.
As you conquer these elements, work towards creating an emergency savings account as soon as you can. Gather at least $1000 by whatever means you can employ (i.e. second job, sell something, etc.) From that point, begin to add to the account until you have equal to three to six months of your normal monthly living expenses saved. Never touch these funds for any reason other than an expense that is unusual or unexpected.
Also, there are forms for recordkeeping and budgeting that are readily available online. These forms are free and invaluable resources, and you do not have to be a financial planning expert to understand or utilize them.
If you do not know where you are going, then any road will get you there. A personal financial budget will be your guide. Remember it is not a static plan but flexible, movable, and changing from time to time as life’s circumstances change (and they will). Don’t be discouraged when these setbacks come, continue to follow your plan. And don’t forget to ask God for help and wisdom with your finances, and He will ever fail to bless.
“But my God shall supply all your need according to his riches in glory by Christ Jesus.”
Philippians 4:19 KJV
H. Duane Pope
H. Duane Pope is a Certified Financial Planner and lives in Mattoon, Illinois with his wife Lorena. He is also an Associate Pastor at Apostolic Center in Mattoon, Pastors Derold Doughty and Shine Doughty.