Preparing a personal budget is about exciting as watching paint dry! It’s not everyone’s cup of tea…but it may be the most important cup you’ve ever made!
The biggest fallacy of a budget is that it “limits you”. Perhaps, if money is endless, this would be true – but for the rest of us mortals, this is not the case. Most of us live knowing the money runs out, waiting and trusting for the next income. Every swipe of the card takes us one step closer to that cliff-edge. Living without a budget is like taking those steps in thick fog – we don’t know how close we are to the edge – every swipe causes anxiety, the fear of the unknown.
“The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5
A budget clears the skies and reveals all the pathways. With a budget, your card swipes are not fear-swipes, but free-swipes! Let me explain: when you create a meaningful plan of how and where you will spend your income, you preload the spend jars in advance – whether needs (like groceries) or wants (like entertainment). So come “swipe-time”, you get to enjoy the freedom and confidence of enjoying the budget you have already created. The spend-jars are full, waiting for their lids to be opened!
How to create a budget:
- Use a template – either an Excel document, a diary or anything that works for you. A good faith budget will include:
- your income
- your commitments to God and to others
- your savings
- your debt repayments
- your regular expenses, and
- your irregular expenses (perhaps once-off, annual or quarterly)
- Ask the bank to give you bank statements, for at least the last three months. See where you spend your money, and how much in these different areas. This is your baseline. It represents what you really do, not what you think you do!
- Pray that God will guide you and give you wisdom
- Now create columns for the next 12 months and drop in your planned income and payments
- Where your expenses are different from your baseline, ask yourself what behaviours you need to change for this to become real
Great start – now you have something to pray over! Your budget may look broken, but you have taken the most important step, you created a plan!