Starting Prayer
Dear God,
Thank You for being the Ultimate Provider over our lives. We want to steward the things You have given us well, and at times that can take a lot of pre-planning, self-restraint, and strategy. Lord, You have not left us without help. You have given us Your Word, Yourself, and the wisdom of those around us as a guide for the heart we should have as we look at how to spend the finances You have poured out onto us. Help us not to follow the crowd of conventional, cultural wisdom if it does not reflect You in the methods and in our hearts. Right now, we are still young, but one day, the choices and habits we settle into today will either lead us down a life of stress, strife, and ignorance or a life of trust, peace, and eternal blessing. I pray that we would be thoughtful of the ways we are not mindful of our spending, and I ask that You would give us wisdom to allocate our money in a way that is not fear-driven.
In Jesus name I pray,
Amen
What is Budgeting?
Budgeting is proactive.
It is deciding the approximate sum of money we will be getting on a monthly basis, dividing that total among different categories, and then, the hardest part, sticking to those percentages.
For example,
If you make $3,000 a month. You decide to follow the 50-30-20 rule AKA spend 50% on needs (housing, food, paying off loans), 30% on wants (those shoes you’ve been eyeing, the new Pokemon game, etc.), and 20% goes into savings.
In terms of money:
50% - $1,500 to needs
30% - $900 to wants
20% - $600 to savings
You may need to trial run these numbers, some people have a 70-20-10 rule, but in the end the importance of this budgeting process is that you are deciding beforehand how to handle expenses before your expenses handle you.
What happens when you don’t budget?
Let’s talk about me as a real life example: I don’t know how much I make as of now, how much I spend, and I have no saving plans. I used to tithe whenever I got income whether from college, family, or my part-time job, but without a budget, I easily forgot about that too.
I am not “free” because I don’t budget, I am actually more likely to be:
Susceptible to spending more than I make
Lead by my shopping impulses rather than sticking to my allotted money
Unable to meet life goals such as buying a car, house, or invest into properties
Living in ignorance or fear than out of security and confidence
Without a proper savings when it comes to emergencies
More stressed
More unhappy
Deal with financial problems that could hurt my future marriage
Influence poor money habits and careless financial thinking onto my children
All very bad consequences of not budgeting.
So, why do I still avoid it?
Fear:
I am overwhelmed by the idea of budgeting despite its simplicity in nature.
I don’t feel like I can do it well - i.e. if I’m going to fail, then why even try?
I don’t think it’ll work.
Lies:
I think I’ll figure it out eventually.
I don’t think I’ll be that bad with my money once I get it.
I feel like without a budget I’ll feel better/more free.
I’m smart enough to not overspend.
Confusion:
I don’t even have a real steady income yet, how can I start budgeting?
I don’t have enough to start budgeting.
Laziness:
I don’t want to track my spending.
Biblical Budgeting:
Read: Why is budgeting important for Christians?7
I believe that God wants us to be a good steward of our money. I don't think this means we never spend our money on things we want, but that we would not be controlled by our impulses and stick to boundaries.
Budgeting is about commitment.
Can you stay committed to what is set in place? Are you easily swayed by spending mindlessly on wants whenever you feel like it without much thought? Do you yield and obey the rules set in place over the immediate gratification of impulse purchasing?
Taken from: A Biblical Perspective on Budgeting
Before you make a budget, you should make a resolve before God and before others that you will be an honest, hard-working, and generous person with what is given to you.
Daniel 1: 8-9 says, “But Daniel resolved not to defile himself with the royal food and wine, and he asked the chief official for permission not to defile himself this way. 9 Now God had caused the official to show favor and compassion to Daniel,”
You know what this means?
Daniel made the choice to follow God’s way, for us we need to do the same and make a resolve not the ways of making money in this world whether it be illegal, cheating, not God-glorifying, etc. So, although things like gambling may not be illegal by the law in some states or child labor laws are lax in other countries, we do not take part in these methods knowing that they do not reflect God’s will, heart, and nature.
When we make a resolve in our hearts, God is our strength and source of provision. Not only that, God can change the hearts of others around us to show favor and compassion.
One day, you will possibly be making more money than you can imagine.
Where will that money go first?
A gift to yourself for doing such a good job?
A donation to a charity?
Paying off your student loans?
Investing to make even more money?
Let’s be clear: none of these things are sinful or wrong in themselves.
I think in the end, God is always asking us from what heart and spirit are we acting on, and disobedience for one person may be obedience for another in some cases.
How to Budget?
Read: Christian Budgeting: A Guide to Why, Where to Start, and How To Steward Money Well
Read: Budgeting 101: How to Budget Money
Read: How to Make a Budget
Start with prayer.
Invite God into your budgeting, asking the Holy Spirit to guide you, and pray for wisdom and discernment about some of the spending choices you’ve been making.
Decide how you want your budget to look like:
This may depend on how often you get paid, but popular choices are to do monthly if not bi-weekly budgeting. The importance of this decision is to ensure you’re able to hold yourself accountable to it.
Look at your regular income basis:
Taking in account your weekly income from jobs, side gigs, and possible parent contributions come to an approximate amount you can expect whether biweekly or monthly.
Prioritize Tithing:
Leviticus 27: 30-34
30 “‘A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the Lord; it is holy to the Lord. 31 Whoever would redeem any of their tithe must add a fifth of the value to it. 32 Every tithe of the herd and flock—every tenth animal that passes under the shepherd’s rod—will be holy to the Lord. 33 No one may pick out the good from the bad or make any substitution. If anyone does make a substitution, both the animal and its substitute become holy and cannot be redeemed.’”
34 These are the commands the Lord gave Moses at Mount Sinai for the Israelites.
I think I’m going to do a whole blog post simply on tithing because of how important it is to having biblical budgeting and faithful finances. I want my own conviction to be strong in tithing because of my lack of organization, I easily forget to tithe.
We should tithe because first things first: The Lord commands us to tithe.
As believers we should err from the excuse of ignorance, forgetfulness, and our idea of being unable to tithe. God does not make commands we are unable to fulfil. When we tithe, we are living in obedience to God’s desires for us to give back what is His and to trust Him.
We are investing into our eternal life through tithes.
Read: Why I Tithe -- And So Should You
Start out simple, then adjust to fit your needs.
The 50-30-20 rule is a simple rule to follow.
50% to needs
30% to wants
20% to savings
However, now that we take into account tithing this ratio may have to look like:
50% to needs
10% to tithes
20% to savings
20% to wants
If you make $60,000
The 30% or $18,000 to your wants becomes 20% or $12,000 instead
Tithing is so easy to “skip” over because it has a cost to it that doesn’t immediately benefit you. It’s easy for me to gloss over in my own mind as I reflect on my own finances, but God continually convicts my heart to think about the importance of tithing in every believer’s life for OUR benefit.
God doesn’t need your money. God made the world. God owns all the money.
God needs your trust, faith, and obedience that tithing teaches.
Zero balanced budgeting
“In zero-based budgeting, your income minus your expenditures should equal zero.”
Read: What Is Zero-Based Budgeting?
Paying off debt
Read: What Does The Bible Say About Debt?
As many college and grad students go through school, loans are often a part of life.
This adds another layer to the 50-30-20 rule or 50-20-20-10 rule for Christians.
If you have loans, then it’s important to aggressively work towards paying off their debts. In the Bible it says, "The wicked borrow and do not repay, but the righteous give generously." (Psalm 37:21 NIV)
Wicked people do not give back their loans whether from the government, private, or personal means. I think that when we willingly take on a debt, we must also seek to pay it off. There are even student loan forgiveness plans to look into, but for high-interest loans like for credit cards or mortgages look into paying those off quickly even if that means making sacrifices.
You don’t need to go to any extremes not spending any money on your “wants”, but it might mean that your budget is divided even further down the line until you can pay the debt off:
Example 1:
50% to needs
10% to tithes
10% to savings
10% to paying off debts
20% to wants
Example 2:
50% to needs
10% to tithes
20% to savings
10% to paying off debts
10% to wants
Notice that tithing and needs go untouched. Be able to support yourself and not burden others, but you may not be able to save or spend for pleasure as much as you’d like for a while.
I am considering doing a blog post solely on taking on/paying off different kinds of debts (student, credit card, and mortgages), and basics that apply to most if not all of them.
Tips to budgeting
[Optional] Read: 50 Budgeting Tips (For Every Stage Of Life)
Here are some of the most useful tips I’ve heard/found:
See budgeting as freedom.
When you have control and mastery over something, you can have fun with it. You can make choices that fit your lifestyle. You won’t have as much stress when it comes to paying off your bills or making purchases. You will have the sense of peace that comes from trusting God and using biblical wisdom on how to spend money.
Have a goal!
Some great goals that come to mind are:
I want to be debt-free.
I want to give back to my parents with $___ a month in mind given to them.
I want to become extremely financially literate to the point where I can easily share and teach others with no prior knowledge.
I want to share the testimony of how God changes my life through my finances, not by giving me more or less, but by teaching me what it means to trust and abide in Him.
I want to have $_______ in a down payment for a house/cart/etc.
Have a separate savings account.
Keep checking and savings separate. If you don’t, you’ll see the money in your account as “free to use” instead of intentionally being saved for a rainy day or down payments.
Think about retirement.
Succinctly put: “When you’re young, retirement seems so far away, but it is actually the most important time to start investing in it. If you are young and budgeting, be sure to emphasize retirement investing–especially employer-match and tax-free retirement accounts like a ROTH IRA, or a ROTH 401(K).
Let me provide you with a little motivation. If you put $11,000 into a ROTH IRA at the age of 18, and let it sit until you turned 65, it would grow to over $2,000,000 at a 12% average annual return. Additionally, if you put $11,000 every year into that same account for that same amount of time, it would grow to over $21,000,000. And, all that money would be tax free.
If that isn’t a reason to emphasize retirement early on, I don’t know how else to convince you. All I know is that I wish I had started emphasizing retirement at 18.
I hope you will learn from my mistake”
Apps
Read: The 7 Best Budget Apps for 2021
There are great apps out there that can be linked to your credit card and serve as a tool for you to keep track and be mindful of your budgeting. Some even let you convert that data into budget spreadsheets. Others let you monitor your credit or alert you to suspicious activity.
Having grace for yourself
I think that having a budget, like any discipline, will come with times where you just don’t meet the mark you set for yourself. This could be due to unexpected cuts to your income, expenses, impulse splurges, or emergencies. Have grace for yourself, the same God extends to us every moment of every day because of Jesus, and learn from mistakes if possible or trust that the uncontrollable was not a surprise to God.
Talking down to yourself for any reason is not what God is looking for.
Remind yourself of the kindness that God has lavished onto you.
There will be other chances. You are doing your best. God is with you.
Accountability
Any good plan needs a team of people working towards the same goal, and that may look like inviting one of your friends to budget with you or sharing with your small group the steps you’ll be taking to make a lasting budget plan.
For me, my blog is a place where I can be accountable knowing that this is a public platform and I want to live out the lessons of what I’m trying to share with others. I plan to do updates for some of the blog posts for this series to see my own progress and encourage others that long term, sustainable change is possible but it’s much easier when you have people by your side.
Ending Prayer
Dear God,
Thank You for being the source of our ultimate source of wisdom and our Provider. As difficult as it can be, I know that You are within us and helping us be self-controlled and strong. I pray that this series will help me learn and help others through this blog. I know that our life is in Your hands.
In Jesus Name I Pray Amen,
Amen
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