Christian finance and consumer credit counseling & debt management
Bible Based Budgeting
Creating Your Budget
Sitting down and creating your budget is one thing, sticking to it is another. Planning ahead is the easy part in maintaining our finances. However, if we want to be successful in our finances we must follow through in what we prayerfully seek out to do.
Proverbs 21:5-6
5 The plans of the diligent lead to profit
as surely as haste leads to poverty.
6 A fortune made by a lying tongue
is a fleeting vapor and a deadly snare.
This is a very revealing step, although it can be disheartening. For a period of one month, list all your expenses, no matter how small. Then you will know where your money goes.
Use a small booklet to list your expenses. Here are a few more tips:
Keep all your receipts.
Use a checkbook to keep track of where purchases were made, the amount spent and what was purchased (food, clothes, leisure activities, etc.).
Keep track of when you receive money, when you spend money and when bills have to be paid.
Verify your credit card statements.
Keep up-to-date records of your finances. Include cancelled checks, receipts, credit card statements, etc.
Step 5: Compare your budget with your real expenditures
At the end of the month compare your budget established in Step 3 with your expenses registered from Step 4. In order to do this, fill in the third column (“real”) of your budget. Comparing your estimated expenses with your real expenditures will tell you a lot about your financial situation. The difference between the two will indicate underestimated and overestimated budget items. You will then be able to make any necessary corrections.
Review and evaluate your budget regularly. Does your budget still allow you to satisfy your needs and reach your goals? Should you increase or decrease certain budget items? These adjustments should rectify or balance your financial situation. Your budget should be flexible: your needs, your values and your income change over time.
Back to the basics
Establish expenditures according to income
Make budget estimates that reflect reality and not your desires
Be disciplined enough to keep track of all expenses for a certain period of time
Have a flexible budget that can be adapted to any situation
What to do when you are running up a deficit
If, after completing your budget, it does not balance, here are few tips:
Reduce your expenses. Certain budget items cannot be reduced, while others can. Fixed expenditures, such as rent, are difficult to reduce. However, variable expenditures (e.g., transportation) can sometimes be limited. Essential expenditures have to be distinguished from expenditures that can be delayed.
Consult the Saving Tips section.
Increase your income.
How to make a budget?
Follow the six steps below in creating your budget.
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Creating Your Budget
