Beginning That Budget
by Diana Kabeizi
The thoughts of the diligent tend only to plenteousness; but of every one that is hasty only to want (Proverbs 21:5).
Before we go into Debit and Credit cards part 2 let me first respond to two emails I received sometime back, asking for tips to manage money and budgeting successfully, because I feel that this is an issue that raises concern and should be addressed by all Christians.
Proverbs 13:22a says A good man leaveth an inheritance to his children’s children. I believe we can not be able to leave an inheritance for our grand children if we do not start managing our money at this very moment. One of the ways we could manage our money is through Saving and Investment . This month we are going to look at Budgeting.
“Though usually overlooked, setting up a good personal budget is the first step to any money management activity. Without it, you cannot control your finances and will always fall short of your goals.” – Mark J. Randall, Certified Financial Planner
When someone talks about budgeting, the first thing that runs through people’s minds are Ms Excel sheets, much paperwork and calculators, however, simply put forward a budget is a Plan for one’s money. In other words; a budget is an itemized summary of probable expenses and income for a given period. Or, you may prefer to think of it as a way to keep from running out of money before you run out of month! No matter how you refer to it, it’s a tool to help you prioritize your spending and manage your money—no matter how much or how little you have (http://www.bursar.iupui.edu/moneymatters/what_is_a_budget.htm).
Budgets can either be for business or personal planning. For the purpose of our discussion we shall mainly look at personal budgets although some of the principles may be applied to businesses, and for both men and women. Budgets do not operate automatically, they require effort and discipline, and therefore for the month of May our task won’t only be making a personal budget but also sticking to it Proverbs 21:5; 20:18b, 1 Cor 14:30). Below are the points we should remember before we make our personal budget.
1. Stewardship-The first thing we should remember is that God is our provider and we should trust Him at all times (Psalm 37: 8-10), and that He owns everything and we are only steward to what He has given us, (Luke 16:1-15)
2. Set Specific goals- These goals should be time bound so that you get enthused to achieve them. Examples could include; reduce credit card debt by 5% by the end of the month, save 10% of my income every month so that I have around £800 by the end of the year.
3. Type of Budget-Decide on whether to use a day-to-day, week-to-week or month-to-month budget. Since this is our undertaking for the month we shall make a monthly budget
4. Sources of incomes- which could include the salaries, wages, pocket money.
5. List everything you need in order of importance for example food, rent, clothing, bills, fuel, and groceries.
6. List the dispensable (non-essentials) for example vacation, gifts, and restaurant bills.
7. Develop realistic budget, remember a budget only helps you to plan for what you have and will not get you more money8. Do not spend over what you afford.
Task: Making a monthly budget.
1. Make a note of the sources of income. For our simple budget we shall take the incomes after tax although some people may prefer to take the basic income. If you receive a yearly income, to get the average monthly income by 12. Incomes may include donations, transfer incomes, part time job or over time. Someone may ask that if they are students, what they would put as their income- the pocket money you receive from your parents or the monthly stipend from your sponsor, allowance or a grant.
2. From the Point 4 and 5 above list the fixed and variable expenses. The fixed expenses are easier to make because one is certain of the rent they pay each month. The tithe also falls under the fixed since we take a 10% of the incomes (Incomes before tax). Variable expenses may include food, utilities (electricity, water bills), recreation, and savings (depending on whether you have decided to take a fixed percentage every month or variable depending on how much you wish to save that month).
3. Balance the Incomes and expenses. If you realise that what you are planning to spend is more than what you get, then there is problem here. It calls for re-evaluating and making changes in the budget
4. Since this is our first month, we want to track our progress so we are going to include in our columns what we actually spent (Proverbs 10:4).
This is an example of Aminata Kagulupande’s budget for the month of May. You could use this as a guide and it would be better if you did it excel (There are some companies that offer Budgeting software to quicken the whole process).
Budgeted (monthly)(£) Actual
Incomes
Monthly Salary 1000
Donations 100
Overtime/Part time job 200
Benefits 50
Fixed Expenses
Tithe 160
Rent/mortgage payment 486
Taxes(if they are deducted ignore this)
Insurance 67
Other 50
Variable expenses
Food 100
Utilities’ 162
Clothing 50
Entertainment 50
Savings 120
Medical 55
Other 50
Balance
“Commit thy works unto the Lord, And thy thoughts shall be established.” Proverbs 16:3.5. Re-examine your budget regularly to check if you are on track.
Blessings and I pray that the above tips help you.
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