Welcome if you are visiting us for the first time here on Wednesdays!! If you want to start at the beginning of this series click on Seeking Financial Freedom on the right hand side of the screen..you will have to scroll down a bit to find it....
BUDGET is the word this week!! Okay so maybe that is too scary of a word.....so if you can't talk "budget" then let's talk about a SPENDING PLAN........whatever you call...it means making a plan on how you will spend your money which will enable you to stretch your dollar even farther!
Here is what the book has to say: (p130)
Budgeting is not always fun, but it is the only way to follow through and apply what has been learned about getting out of debt, saving and giving while still meeting basic needs. Regardless of income, most of us have difficulty making ends meet unless there is a plan for spending. Expenses always tend to rise just a little higher than income.
Budgeting provides an opportunity to pray about spending decisions.
How to Budget (p. 131-138)
Step One: Begin where you are today
Developing a budget must begin with the current situation. Determine precisely how much money is earned and spent. Most people do not know what they are actually earning and spending. For this reason it is essential to keep a record of every penny for a month to get an accurate picture in order to complete an estimated budget.
I would recommend that you buy a little notebook (one that is small enough to fit in your purse or your pocket)
one for you and one for your spouse. Each time you spend any money write is down. When Justin and I did this we would write what we bought and how much we spent....it helped us to know exactly where we could be better stewards...(aka: figure out where we were throwing away our money)
If your wages are not the same each month ( like with a commissioned income), make a conservative estimate on your annual income and divide by 12 to establish a working figure for your monthly budget. The same goes for things like real estate taxes, insurance, vacations...estimate how much you spend on each, then divide by 12 to determine your monthly cost.
Step Two: The solution is where you want to be
To solve the problem of spending more than you earn, you must either increase your income or reduce your expenditures. It is that simple: Either earn more or spend less.
Adding to your income
A part-time job, or better yet, a project that would involve the whole family are ways of increasing your income. The ever-present danger of increasing income is the tendency for expenses also to rise. To avoid this problem agree ahead of time to apply any extra income to balancing the budget the budget. Another potential problem is that a family member may sacrifice relationships in order to earn extra money.
PERCENTAGE GUIDELINE FOR EXPENSES: (after giving & taxes)