Advertisements

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.

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?

Up Next: Basic budget methods

Advertisements

Trackbacks

  1. […] Up Next: The Bible on budgeting for now and for later Advertisement GA_googleAddAttr("AdOpt", "1"); GA_googleAddAttr("Origin", "other"); GA_googleAddAttr("LangId", "1"); GA_googleAddAttr("Autotag", "business"); GA_googleAddAttr("Autotag", "money"); GA_googleAddAttr("Tag", "mastering-your-money"); GA_googleAddAttr("Tag", "bible"); GA_googleAddAttr("Tag", "budget"); GA_googleAddAttr("Tag", "money"); GA_googleAddAttr("Tag", "proverbs"); GA_googleAddAttr("Tag", "spending"); GA_googleAddAttr("Tag", "strategy"); GA_googleFillSlot("wpcom_sharethrough"); Share this:TwitterFacebookEmailPrintLike this:LikeBe the first to like this post. […]

  2. […] of today’s surplus to save for tomorrow, so that we can pay for both the expenses that we do foresee coming down the road, as well as those that we do […]

  3. […] for your family. And though we all have ways in which we can improve as workers, planners and budget-makers, the priority of providing comes fairly naturally to us. It’s instinctual and innate; even […]

  4. […] your budget has lots of good intentions and great ideas; you’ve even remembered to budget for expenses that will come up in the future. But that budget is inanimate. It has no power. On its own, it accomplishes nothing. A budget […]

  5. […] that you’ll have to pay at certain times of the year. Remember, part of building a budget is planning for the future, so you need to factor in additional categories such […]

  6. […] gifts come around only once or twice a year. And so while we should always be planning for these future needs in our budgets, we don’t always need to leave that money sitting in our main checking […]

  7. […] from your parents, but you can instill in your children the importance of discipline and budgeting. Your parents may have spent their entire lives in debt, but you can teach your children how […]

  8. […] a plan for how you’re going to use your income to achieve those goals. That plan is called a budget, and it’s an absolutely essential tool to financial […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Copyright Brian Jewell, 2011-2013

All of the contents of this site and its posts are copyright of Brian and Laura Jewell. Any redistribution or duplication of this material, without the consent of the authors, is strictly prohibited. Instead, please feel free to link to us. Thanks!

Disclosures

All content on this site is given on a general basis and is intended for informational use only. The content does not reflect any professional legal, investing, accounting or tax advice, and should not be used as the sole basis for making financial decisions. Always consult a certified financial professional before investing.
%d bloggers like this: