Steps To Making And Living On A Budget printable pdf download

Steps To Making And Living On A Budget

Stewarding Your God-Given Resources

Living by a budget isn’t just for people who have debts to pay. Jesus shares that Kingdom people

should “count the cost” before starting to build a house. A budget is a way to spend, and save, wisely

for the Kingdom of God.

You need to know your income. If you are going to make a budget, you need to know what your

monthly income will be.

Determine budget percentages: Using the chart on the following page, look at the recommended

percentages that you should consider spending in each part of your budget. These are important. If you

over-spend in one area, it will squeeze you in other areas. You need to set a target percentage for each

area using the guidelines that are provided by Dave Ramsey. Then see how much that percentage is in real

dollars. The total percentages you allocate cannot exceed 100% (This may be obvious, but it doesn’t hurt

to state the obvious).

Give every dollar a name and make it obey: Now divide those real dollars up in the categories. You

will see a form on the page after the chart that details what goes under the housing category, the

transportation category, etc. Your goal is to give every dollar a name and make it obey! The more specific

your budget is the more helpful it will be. I used to have an amount allocated under miscellaneous for

haircuts...that is pretty detailed.

Smoothing expenses: Think about what expenses you will have irregularly or infrequently. This can

include money you will spend on Chi Alpha retreats, Christmas presents, vacations, car repairs, etc. You

know these things are going to happen and will be substantial to your budget when they do happen. So,

think about how much you typically spend annually on each category and then divide that amount by 12.

This will tell you how much you should budget monthly for that expense. When you get paid, transfer the

amounts you are saving for each of these to your savings account. If you don’t have a savings account, you

should open one (the “extra” money sitting in your checking account is too tempting to spend if you leave

it there). Then when these expenses occur, you will simply take the money out of savings. If you fail to

plan for these expenses, you will be planning to fail. These are often the expenses that take us into debt

and cause us to revert to using credit cards.

Envelope method: Once you have established your budget now it is time to actually use it! For items on

your budget that happen throughout the month (expenses that are not just writing a check once a month),

I encourage you to go to the bank after pay day and take out cash for each of these categories. Then go

home and put cash in an envelope for each category. When it is time to go to the grocery store, take cash

out of the grocery envelope. When it is time to get gas, take cash out of the gas envelope, when it is time to

go out to eat, take money out of the eating out envelope, etc. When the cash for each category is gone for

the month, it’s gone—no transferring money between envelopes! If you do this, you will not overspend on

the categories. It is one thing to make a budget; it is another to live on it.

Evaluate your budget after a few months to see if the amounts are feasible or if there needs to be some

changes.

Build an emergency fund as soon as possible: For starters try to save $1,000 as fast as you can.

This will help when an unexpected expense comes your way. If you have an emergency fund you will not

have to go in debt to pay for the unexpected expense. If you do not have an emergency fund, you will have

to go in debt. So, save $1,000 as fast as you can. The ultimate goal will be to accumulate 2 to 3 months of

expenses in your savings, in case you were to be laid off, or some other financial difficulty were to come

your way.

Other tips:

•

Make sure you start practicing generosity through budgeting tithing and supporting missions.

•

Make sure you start saving for retirement immediately after graduation.

ESOURCE FROM

LPHA AT THE

NIVERSITY OF

IRGINIA

Steps To Making And Living On A Budget

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