So you want to be the master of your money… that’s great. You’re committed to getting out of debt, spending wisely and giving to support good causes. But how do you take these good ideas and turn them into something you can actually do?
The answer is to make a budget.
“Budget” can be a scary word, conjuring up images of congressional committees or the accounting offices of multinational corporations. For some people, budget means broke — the idea of living “on a budget” implies pinching pennies and slogging through life without any luxuries. But a budget need not be any of those things.
Budgets accomplish two main goals: First, a budget is a way of documenting your financial life on paper. It shows where your money comes from, and where it goes. Second, a budget allows you to make informed, strategic choices about spending and saving. Since you have a good documentation of your financial habits, you can easily see areas that need some work, and redirect your money flow to meet those needs.
Our friend Young American benefited from a budget in both of these ways. Putting his spending down on paper demonstrated how badly Young American was over-blowing his salary. And having a document to work with also allowed us to make suggestions about our friend’s lifestyle that will put him on solid financial ground.
Here’s another way to think about it: If money is like water, a budget is the plumbing system that we build to make it flow where we want it to go.
Budget’s are some newly-invented system, either. The Bible tells us to keep careful track of our financial lives in Prov. 27-23-27:
23 Be sure you know the condition of your flocks,
give careful attention to your herds;
24 for riches do not endure forever,
and a crown is not secure for all generations.
25 When the hay is removed and new growth appears
and the grass from the hills is gathered in,
26 the lambs will provide you with clothing,
and the goats with the price of a field.
27 You will have plenty of goats’ milk to feed your family
and to nourish your female servants.
I’m not a farmer, and you’re probably not either, but the advice in this proverb still applies to us. For today’s society, knowing “the condition of your flocks” and giving “careful attention to your herds” means keeping an eye on your bank account, and knowing exactly what your money is doing. After all, “riches do not endure forever.” If we don’t carefully plan our finances, and direct them where to go, we will one day find ourselves broke.
The passage goes on to give us really good news about what financial vigilance can do for us: “You will have plenty of goats’ milk to feed your family and to nourish your female servants.” Your family probably drinks cow’s milk instead, but you get the point — when you stay on top of your finances, you’re never caught unaware. Telling your money where to go each month ensures that your most basic needs, like food and shelter, will always be met.
Budgeting is the absolute best way to become master of your money. And the Bible gives us several more important strategies to use in building our personal budgets.