Sure seems daunting to make a budget for your household, right? Rather sign up for tooth extraction?
Making a budget can sometimes seem like punishment for overspending, but it doesn’t have to be. Consider re-framing this exercise to be a game or a quest for higher glory and remember that it is all about aiming at a positive golden goal. A goal that can enable you to spend more on something you need, something you want, or something you need to accomplish. And it doesn’t have to be complicated; in fact, it can be done in three pages.
To create your budget in three pages, you can use the following steps. If you are a spreadsheet person, you can use one of those, or you can also use a blank legal pad.
On the first page write and answer this question:
Where are you at now in your financial life?
The first step is to take an inventory of what you have. Make a list of all your income sources – total savings and checking accounts. Then also put in all bills and monthly expenses. Log a list on paper or spreadsheet for three or four months to get a sense of where your bills are and where cash flows through your wallet. Make sure to put a line item on that list for the occasional coffee or ice cream. Also review a year to catch all the one time or occasional expenses such as car insurance, property taxes, and school costs.
Summarizing all of your assets on one side of this first page and your monthly and annual expenses on the other side might be a good way to put everything visible and realize the scope. Many people I have seen dive into this have found additional ways to trim out unnecessary spending and fees.
On the second page write and answer the following question:
What needs do you absolutely have to satisfy?
These are the critical payments to run your household. Calculate a monthly amount for annual one time only expenses and list those now as monthly. Oh yes, don’t to forget to include a tithe your church.
Remember as you do this the importance of keeping in check the role money plays in your life and where you are putting your trust, “I say this for your own benefit, not to lay any restraint upon you, but to promote good order and to secure your undivided devotion to the Lord.” (1Corinthians 7:35)
On the third page write and answer this question:
What do you want?
If and when your needs are covered, then you can turn to your medium to long-term goals and desires. In the 2007 movie “The Bucket List” Morgan Freeman and Jack Nicholson star as goal driven bucket listers. Gallivanting across the world on a seemingly unlimited budget brings them back home to realize what is truly important.
All of us need a bucket list to move us toward the long-term best life we can imagine. Satisfying our needs, wants, and aiming at new wishes often can allow us to live in the freedom Christ calls us to. Remember that the whole point of making a budget is to help us rein in our spending so that each day little by little we can work towards these bigger wishes.
To read the next blog in this series, click here.