Friday August 26, 2011

Read Proverbs 21:17; 23:20-21; 24:27

Budgeting

Many of us are faced with the problem of too much month left at the end of our money. The Scriptures tell us to plan (Prov. 16:3,9; 21:5; 27:23-24; Isa. 32:8; Luke 14:28-30; James. 4:15), and a budget is a tool that will help us do this on a short-range (yearly goals) and long-range (lifetime goals) basis. It takes discipline to put our priorities into practice, and we need to avoid the extremes of no plans (complacency) and rigid plans (legalism).

Benefits of Budgeting

--Enables us to plan and pray through our spending and giving priorities.

--Gives us control over expenditures. Unless they are controlled, expenses will typically rise at a slightly higher rate than income.

--Enhances family communication when the family participates in spending decisions and financial goals.  This can ease tension and reduce arguments.

--Limits impulse spending.

--Helps us live within our means.

--Reduces pressure of financial obligations.

--Provides for vacations and major purchases.

--Causes us to organize and prioritize expenditures.

--Sets money aside for emergencies.

--Assists in getting out of debt and creating a surplus so that we can better respond to the needs of others.

--Establishes a reasonable maximum standard of living.

 

Obstacles to Budgeting

--Unrealistic and inflexible budgets.

--Failure to follow through with a budget. Discouragement can be caused by the required discipline, deferment, and sacrifice.

--Hidden expenses: non-monthly items not taken into account.

--Poor records and bookkeeping errors.

--Social pressure of materialism.

--Confusion of wants and needs.

--Impulse spending: spur-of-the-moment expenditures on unnecessary items.

--Using credit for instant gratification.

--Using credit to delay needed decisions.

--Overspending on gifts (e.g., Christmas).

--Lack of surplus to deal with unexpected expenses.

 

Tips on Budgeting

--Surrender complete control and ownership of what you have to God.

--Honour the Lord with your money by giving first (Prov. 3:9-10).

--Pray for your needs--God may provide them in ways you could not anticipate.

--Maintain good communication by discussing financial policies openly with your family.

--Keep good records and reconcile your cheque-book each month.

--When you budget, take into account the yearly cost of small items that add up (e.g., lunches and newspapers).

--Be a good steward in your spending. Ask questions like these when

considering a purchase: Do I need it? Am I buying it for materialistic reasons? Will it hinder my spiritual growth? Can I afford it? Is it the best buy? Have I asked God to supply this need in His way and time? (Ps. 37:4-5; 1 Cor. 6:12; 1 Tim. 6:9; 1 John 2:15.)

--Credit cards should only be used as a convenience when they are paid in full each month so that no interest is charged. If we use them to borrow against next month's check to satisfy present cravings, they will throw our budgets off.

--Set up a savings account and make monthly deposits into it for emergencies and non-monthly bills like car insurance.

--Do not become a victim of impulse spending. When you have an urge to make an unplanned expenditure, put it down on an impulse list and date it. Wait thirty days and pray about it before making the purchase. You will find that most of these impulses will not last.

--Budget an equal personal allowance for the husband and wife for which they are not accountable.

--Remember that the more money we make, the harder it is to live by faith and the more careless we tend to get about expenditures. It always takes discipline to keep from spending to the limit of our income.

 

Steps in Budgeting

1. Determine your current situation by keeping a strict record of every dollar spent in the next two months.

2. Create an accurate budget of what you are currently spending and earning. Include expenses that do not come due every month by estimating each on an annual basis and dividing by twelve.

3. Determine where you want to be by analysing your existing budget and deciding what changes need to be made. You may need to find ways of reducing expenses or adding income.

4. Reassess and adjust your budget periodically.

5. Don't give up. It may be frustrating, but a budget will save you money, help you stay out of debt, and enable you to plan for the future.

Materials like the Family Financial Planning Workbook issued by Christian Financial Concepts are available to guide you in budgeting. This workbook includes monthly income and expense forms, percentage guidelines (e.g., what percentage of income after taxes and giving should go to housing, food, auto, clothing, etc.), and other useful forms.

 

Having studied stewardship now for several weeks, it’s time to start seriously thinking about your level of giving. Considering all that you have learnt, write down what you will give back to the Lord in your time, talents & treasures. Ask someone else to keep you accountable for your pledge to the Lord.

Prayer:

> Praise God for His forgiveness, ask, confess and seek God to forgive the temptations you have fallen into and ask Him to show you how to have a more productive God centred use of your time.