Day 3: Make A Budget

Oh, the budget topic. Here we go!

We learned before that money is a tool used to accomplish God’s purposes and that we are called to be stewards of what God has given us.

So if everything is God’s, which makes us stewards, and we want to be good stewards to glorify God, then we need to know what we’re doing with what God has given us, and a budget helps us do that.

A budget is how we keep track of God’s tool.

Unfortunately there are many negative connotations we have to deal with when thinking about a budget. Most people think being “on a budget” means you can’t manage your money well or that you don’t have any of it. But consider this:

Think of a business you work for or have worked for before. How many of those companies have an annual budget? How many of those companies still make a lot of money? And if they do, why then do they still have a budget?

A budget is not negative or something you’ve put in place because you can’t manage money. In fact, it’s the opposite. It IS how you manage the money. In fact, if you don’t have a budget, then you couldn’t be managing money well. At the very most, you’re reacting to how money is spent versus proactively telling the money where to go.

Be A Good Steward

We create a budget because God cares about what we do with what He has given us and cares enough to audit us when He returns.

That being said, one of the most important things we can do when making a budget is pray. Budgeting is a prayerful exercise. You need to pray through your budget (if married, do this together) so you can better understand what God wants your budget to look like.

Define How Much Is Enough

A budget forces you to define how much is enough. Left to ourselves, without a budget, our “enough” constantly expands, usually at a higher rate than our income. A budget plants a flag that says “This is enough.” Increases in income don’t have to be immediately followed by increases in spending on ourselves. It can mean increased giving, then increased savings, then increased spending. (Whatever it means, it’s prayed through prior to creating or adjusting the budget.)

Work To Meet Your God Given Goals

When we have important goals in our lives, we write them down. We consider what the end goal looks like, then we back track it all the way to our current day, in order to lay out the steps to achieve that goal. If we are just reactive with our money, don’t have a plan, occasionally just glance at our bank balances, then we don’t ever get the shot to write down our financial goals, and make proactive steps to achieve them.

A budget allows for you to not only manage God’s money well, but also allows you to lay out the goals you believe God has given you, and then make steps in order to achieve those goals. You better believe God isn’t just giving you money just to give you money. Remember, it’s His tool and it’s used to accomplish His purposes.

Budget Principles To Remember

Plan your spending away from the actual spending. Take time to plan out your budget before you start spending the money. That way it helps remove emotion out of the decision making.

Every dollar must have a home. As you lay out your category lines in your overall plan, every dollar of income has to be put into one of your categories. You can’t just leave money sitting out there; it must be assigned. That means by the time you complete your budget, you should have Income minus Allocated Category Lines = 0.

You can’t spend what you don’t have. Once your category runs out of money, you are done spending money for that category until you get paid again. This rule applies to the overall budget as well. Just remember, you can’t spend what you don’t already have. Do not use debt.

Track everything the first couple of months to make sure the budget is accurate. And give yourself some grace because this is hard work and it takes time.

For extra or unexpected income, remember you still have to give every dollar a home. Pay off your debt, put it towards your goals, or reward yourself with some extra entertainment money, but no matter what you do, make sure you pray about it and then assign it.

Getting Started And Budget Resources

So what are you waiting for? Get started! No matter what kind of tool you use to help you, you’re going to list out all of your income and expenses that occur within a month. You’re going to lay all of that out and then pray through the budget categories to create (tithe, savings, rent/mortgage, insurance, groceries, fuel, etc.). This will help give you an idea of where you are at and where you need to go from there.

There are many many tools out there for budgeting so the best thing I could tell you is whatever system works for you and helps you be a good steward, use that system. So whether it’s pen and paper, a spreadsheet, or various online tools, find the system that works for you and stick to it.

Here are some resources.

Mint
You Need A Budget
I Was Broke. Now I’m Not.
Dave Ramsey
ChooseFi
Crown Personal Finance
Personal Capital

What We Do

I started with Mint a long time ago to learn where I was spending money. It was good, not perfect, but started getting me to think more. I tried various spreadsheets for budgeting, but what ultimately worked for me more than any other system was You Need A Budget (YNAB). No, this isn’t a sponsorship and there’s no affiliation here; it’s just a tool that has worked great for me and our family and I haven’t found a tool out there that can beat it.

So we have one budget, and within that budget plan are about 25 lines. I have tithing and other giving lines at the top, savings and other goals after that, our monthly fixed bills after that, and then lines like groceries, fuel, my allowance, and Joelle’s allowance after that.

Quick note for marriages: You must budget some “personal spending money” with no questions asked. Those lines for us are called “allowances,” and you can call yours whatever you want, but it’s very important in your marriage to give each other money of your own to spend with no conversations about it. Just set it and move on.

Each month, every dollar is assigned to their lines and then we spend money “out of our lines.” I rarely look at our bank balance anymore (except for when I’m reconciling to make sure things are being recorded correctly). Instead, I’m looking at the available balances of each individual line. When we go to the grocery store, it’s not “how much money do we have in the bank?” but rather “how much money do we have in groceries?” and we make our decisions from there.

This allows us to keep on track with giving, move ahead on our goals, stay out of debt, and be good stewards of our lines and overall budget. And I’m typically recording each transaction in about three seconds using the YNAB app, so our budget is always up to date.