Christian finance and consumer credit counseling & debt management
Bible Based Budgeting
Creating Your Budget
A godly person plans their lives so they may bring glory to our Father. Budgeting is being good stewards of what God has given to us.
Proverbs 15:21-25
21 Folly delights a man who lacks judgment,
but a man of understanding keeps a straight course.
22 Plans fail for lack of counsel,
but with many advisers they succeed.
23 A man finds joy in giving an apt reply—
and how good is a timely word!
24 The path of life leads upward for the wise
to keep him from going down to the grave.
25 The LORD tears down the proud man's house
but he keeps the widow's boundaries intact.
Step 1: Evaluate your personal financial situation
First, take some time to evaluate your personal financial situation. Ask yourself the following questions.
What are my needs?
What are my attitudes to money?
How are my finances today?
Step 2: Set financial and personal goals for yourself
Your goals will depend on your personal financial situation. Goals, or objectives, could include anything from purchasing a snowboard, to going on a trip, to moving into an apartment. The best way to reach your goals is to determine your short-term, mid-term and long-term goals, and place them in order of priority. This will allow you to create an action plan that will help you reach these goals.
Your objectives must:
Be realistic (a student working part time cannot usually afford to buy a house for a few years).
Be specific and measurable (I want to save $1,200 to go on a trip).
Have a determined time frame (I want to pay off my car loan in three years).
Establish the necessary actions to achieve your goals (I will transfer $100 per month from my checking account to my savings account).
Use the proposed template to establish your budget. Plan your income and expenses for a period of one month. Try to be as realistic as possible in your budget estimates. Try to predict unexpected expenses in your budget. And do not forget your goals.
There are a number of ways to establish a budget; it can be on a daily basis, a weekly basis or a monthly basis. Some budgets are very detailed, while others are less detailed. What is important is for you to find a budget that suits you. Do not hesitate to adapt this budget to your situation.
To complete a monthly budget, you must convert your income and expenditures into monthly amounts. For weekly amounts, multiply by 4.3 (example: $55 for groceries per week x 4.3 = $236.50 per month).
A budget item is a category of expenditures. For example, rent is a budget item, as are clothes.
In your budget estimate, do not forget to consider certain big expenses such as moving, starting a new school year, buying presents, etc.
Avoid…
To make sure your budget works, be honest. Here are some things not to do when preparing your budget
Forget or purposely reduce your expenses.
Overestimate your income (it's better to be conservative).
Use next month's income to balance this month's budget.
Rely on your borrowing ability to make up a deficit.
How to make a budget?
Follow the six steps below in creating your budget.
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Creating Your Budget
