In a couple of weeks, Ashley and I will be celebrating our one-year anniversary! Today I was thinking about some of the practical things that made our first year together a success. One of the many tools we implemented was a budget that we actually use.
YOU NEED A BUDGET!!!!!
I cannot overemphasize that point. Whether you are in high school, college, a 9 to 5 (or more than one of those) you NEED to be following a functional budget. Below are three reasons why.
“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” – Proverbs 21:5
- A budget helps maximize your giving.
One of the pushbacks I hear about sticking strictly to a budget is that it overemphasizes money. Honestly, I think this is just an excuse for lazy and foolish people to not properly manage their finances (before you get mad that I called you lazy and foolish, go read Proverbs and you’ll find out it’s true). I have found that keeping a budget does not decrease your giving, it actually INCREASES it.
When you form a budget you are able to create certain categories that have set amounts. When you spend out of these categories, you do not have to feel guilty or worried about your monthly bills because you know you can afford to spend money in that area (as long as your budget is actually functional of course).
Practically, I highly recommend having at LEAST two areas for giving in your budget. The first one being tithing to your local church (yup, that DOES mean at least 10% of your income). Second, I would recommend setting apart an amount that you can give to other people. This amount can be used for any type of giving – from charity to taking a friend out to eat. This will make you much more generous AND give you confidence that you won’t go broke.
- A budget destroys the power of money.
If you have never used a budget, you probably think this point is counterintuitive. You may be asking, “How does spending time managing my money help remove its power? Wouldn’t that put a greater focus on cash?” The keyword to that question is MANAGING.
Either YOU will manage money or MONEY will manage you.
If you are going through life without a budget (especially if you are on a fixed income) you will constantly be attacked with thoughts of anxiety and stress over your finances. You will buy a gift for someone or have to repair your car and then spend the next two weeks worrying about whether or not you will be able to pay your rent and electricity bill.
If you manage your money properly, money will serve you. If you do not manage it properly, you will serve money.
- A budget increases your income.
Okay, not technically. If you stick to a budget I cannot promise that your income will go from $30,000 to $60,000 but it WILL increase your savings and your overall wealth. Sticking to a budget is not a “get rich quick” scheme. It takes many years of discipline. Yet the time will come when you will look back and are grateful you heeded the advice of being strict with your spending habits.
“If you live like no one else, later you can live like no one else.”
Above is a quote by Dave Ramsey. If you live and are strict on your budget now, you will reap the rewards later. This should not be your sole reason for sticking to a budget but it is the eventual outcome. I would like to take some liberty and change Dave Ramsey’s saying slightly… If you live like no one else, later you can GIVE like no one else.
Sticking to a budget will maximize your giving, destroy the power of money, and increase your income! So why not give it a shot?
Do you use a budget? What are some of the advantages that you have noticed when it comes to properly managing your finances?
By the way, I highly recommend checking out the ministry of Dave Ramsey. His website can be found at www.daveramsey.com – He has loads of Biblical wisdom when it comes to managing finances.