A Budget for the Future

Via Flickr, by user uberculture. Used under Creative Commons License.

You passed the sixth grade, right? So you have pretty good handle on arithmetic.

I’ve got some great news: Basic math skills are all you really need to figure up an accurate monthly budget. You add up the amount of money that comes in, subtract money for everything you spend, and then see what you’re left with in the end. But is that the whole story?Budgets are the plumbing systems that allow us to direct our liquid assets to where we want them to go. And it’s fairly easy to put together a system that channels your income to your predictable monthly expenses. The math is so easy that a sixth grader could do it. But to be successful with budgeting, we also need a skill that most children don’t have — foresight.

The ability to “see into the future” is critical for good planning. This doesn’t mean blind speculation or some mystical power; it means using the skills and experience you have from life to anticipate what your future needs will be. Consider the example that the Bible gives us in Proverbs 6:6-8:

“Go to the ant, sluggard; consider her ways and be wise; who having no guide, overseer, or ruler, provides her food in the summer and gathers her food in the harvest.”

You could draw a lot of different lessons from that passage, but our concern here is the fact that ant is working with his future needs in mind. Food is plentiful and abundant now, but a time is coming when it won’t be. So he’s wisely storing up some to use later on.

How does this apply to our personal budgets? Well, one of the biggest mistakes that beginning budgeters make is that the add up all of their monthly expenses, but fail to take in to account things that only happen once or twice a year. In Young American’s case, things like car registration, Christmas gifts and dentist visits were costing money that was unplanned for.

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So when we build our personal budgets, we shouldn’t set out to spend the same amount that we take in every month. Instead, we need to make sure that, like the ant, we have enough set aside to take care of this semi-regular expenses that will come up in the near future. The better job you do at anticipating and accounting for these things, the more accurate and useful your budget will be.

Budgets work even further into the future, too. Consider what Luke 14:28-30 has to say about long-term planning:

“For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing him begin to mock him, saying, ‘This man began to build and was not able to finish.’”

Jesus isn’t necessarily teaching on finance here, but we can pick up some wisdom in passing. Long-term financial projects — such as buying a home or saving for retirement — require a lot of advance planning. If we’re not careful in planning for these things, and ensuring that we have the finances to accomplish them, we can make an embarrassing mess.

So budgeting isn’t just for this month, but for the future. When you build your budget, consider your family’s long-term financial goals, and make sure that your diverting some of your cash flow into preparing for those things. Since you will be saving a set amount every month, it will be much easier to project when you’ll have enough money set aside for a car or a down-payment on a house.

Thorough, thoughtful budgeting like this makes financial planning — and life planning —  much easier. With a solid plan in place, you can live, spend and save intentionally and strategically, instead of simply hoping that you‘ll one day have enough money to accomplish your goals.

Put simple math and mature planning together, and the future is yours for the taking. Ready to get started?

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