Moneywalk 154: A Budget is Essential

This program will help you undo financial bondage.

Many people think budgeting is unnecessary, however the vast majority of people who do not budget tend to be in poor financial condition and the other few will likely come into a bad financial condition at some point in their lives because they fail to currently employ this principle. Some financial advisors proclaim that budgeting is unnecessary, but we find they actually teach budgeting when we look deeper into their instructions.

They often call it by another name such as spending plan, income / expense plan, etc. For example, one financial advisor said he doesn’t budget rather when he receives his income, he immediately sets aside a percentage to pay expected taxes, puts ten percent into a savings account and ten percent into an investment account. Then, he spends no more than what is left and repeats the process when he next receives income.

Well, that is budgeting. It’s a principle for which there are various methods to carry it out. It can be intricate or simple. Generally, the more creditors you have the more intricate it will have to be to navigate the maze and this is what causes many to ultimately slip and fall into financial turbulence and ruin. That is why you want to engage debt-freedom, so you can have a simple budget that helps you keep life in perspective and weather every storm that will eventually come your way.

Scripturally speaking, the underlying parameter is the same no matter which method is used. You should have a written plan to spend far less than your income and identify necessary alterations to your lifestyle and spending habits to eliminate all your debts.

In the end analysis, any good business or personal financial situation relies on budgeting in order to get on, stay on, and grow on a secure foundation. The method that we employ and encourage entails the following.

1.   List all your net monthly income. This is gross income minus taxes paid and owed to governments and other costs that will be payroll deducted by your employer and which you do not have access to spend (health care, union dues, etc.).

2.   Subtract the tithe and offering.

3.   List all your monthly bills. Bills due more often and less often than monthly should be re-calculated to an amount equal to a monthly payment.