Budget 101: Yes You Should

Let’s talk about The Budget.  No, I did not just swear at you.  It’s going to be fine.  In so many households, “budget” is a dirty word.  It denotes deprivation, poverty, and Ramen noodles.  Friends, it does not have to be this way!  The Budget is a valuable and frequently misunderstood tool in your belt.  Today we’re going to lay the groundwork for an effective, long-lasting budgeting habit.  We’ll talk about why The Budget is so important, what The Budget is not, and what The Budget is.  At the end I’ll give you some clear, boots-on-the-ground action steps.

Why is The Budget so important?

Jesus talks a lot about money: don’t love it, greed is deadly, generosity is a reflection of His character, count the cost before making a commitment, remember it isn’t ours to keep.  The point is that we are stewards of the financial gifts that God gives us, so spend wisely.

The Budget requires us to be intentional with our resources, and holds us accountable for the choices we make with money.  Furthermore, it helps us make advancements in three key areas:

1. Giving.  God loves a cheerful giver.  The money in our bank accounts is a gift from God and isn’t ours to clench tightly.  Giving is a blessing to those who receive the benefits, and to those who joyfully give out of obedience to their Lord.  If you are a Christ follower but are not regularly giving to the church that feeds you spiritually, ask yourself why and get prayerful.  If the reason is that there’s simply not enough to eat and give, be encouraged by the parable of the widow and her pennies!
2. Freedom.  This may sound discordant to you because “budget” is so often synonymous with “restrictive”.  Anyone who has ever stressed about having enough in the gas tank or stayed up at night sweating over stretching $37 to the end of the month knows the angst of uncertainty.  Making a plan for your dollars means that you know the bills are paid, and that you’ve allotted yourself gas and grocery money.
3. Goals.  When Mason and I got married at the ripe age of 22, we had exactly no money in savings and were $70K in debt.  Between student loans and credit cards, we were staring into the cold, dead eyes of eternal interest payments.  We set two goals for ourselves: save $1000, and pay off all debt as quickly as possible.  The first goal was a sprint.  The second goal was a marathon that took 4 years.  We talk about debt elimination strategies here.  Let me tell you, this was by the grace of God and good budgeting.  The song says we are no longer slaves to fear, and The Budget says we are no longer slaves to Sallie Mae.

Budgeting can help you achieve many wonderful things, but please hear me: under no circumstances does a good budget purchase happiness, holiness, or wholeness.  This is a multi-purpose tool that we are blessed to use for God’s glory.

What The Budget Is Not

We’ve addressed why we budget, and now that we’ve gotten some purpose driven context, let’s dispel some nasty lies about The Budget.

A budget is not:

1. A diet for your bank account.  This is not a “cut carbs, drop five pounds, eat pasta to celebrate” kind of thing.
2. A punishment for overspending.  Last month I was super out of control, so this month I’m just not going to buy anything.  I’ll just eat these expired Pop Tarts and stay home.  That’s not healthy- you need fruit!
3. A weapon to be used in your relationship.  Budgeting is a team sport.  Don’t use this to hurt one another- work together to make a change.
4. An unattainable New Year’s resolution.  If making a budget is on your list every year, don’t despair.  You can do this, and it doesn’t have to be January to make it work!
5. Only for adults, married couples, or broke people.  Anyone with an income should make a plan for what those dollars do.  

On behalf of The Budget, I’d like to say that these ugly rumors have given a scarlet letter to the most undeserving of tools.  I am an obnoxious budget-lover (a well kept secret).  I love the organization, the rhythm, the progress that comes from making a plan each month.  The Budget is not the bad guy, our bad habits are the bad guy.

What The Budget Is

Okay, now that we’ve cleared the air, let’s define The Budget.

A budget is:

1. A plan for your money.  All a budget does is tell your dollars where to go, so that they’re not disappearing each month.  And guess what?  You are the boss- you get to tell those dollars where they belong.
2. A tool to achieve goals.  Want to get out of debt/build a new deck/go on vacation?  Use your budget to get there.
3. A method of self-control.  If you constantly overspend on eating out, iTunes, Amazon, wine (ahem, guilty), or fill-in-the-weakness, use your budget to rein it in.  Note: I am not saying cut out the things you love, that would be crazy.  What I’m saying is give yourself an allowance for those things, and be responsible to stick to that.
4. Easy.  Sure, the first few months there’s a steep learning curve, but once you get the hang of it your budget can essentially go on cruise control.
5. For everyone.  I said it before, but this stands repeating: Literally anyone with some form of income should make a plan for what that income does.

See, it’s not so bad right?  You plan for the necessities and your primary goals, and then you get to tell the leftover dollars what their job is.  And their job can be to purchase a case of 90 point wines, or a new mattress, or a wedding dress, or pay the electric bill for your elderly neighbor.  That’s the best part.

Getting Started

So if you’ve decided that this month you’re going to start your budget, that’s awesome!  Here are some practical steps to take for the month of April (if you’re reading this from the future, don’t wait until April, just get started).

1. Track your spending.  As in keep your receipts.  Next month you’ll add up what you spent on various categories and decide if that’s a reasonable amount or if changes need to be made.
2. Save your bills.  Store every bill that comes this month with the receipts you’re keeping.
3. Add up your debt.  Know how much you owe and at what interest rate.
4. Set some financial goals.  If you’re married, do this with your spouse.  If you’re single, share your goals with an accountability partner.  I highly recommend you take a look at Dave Ramsey’s 7 Baby Steps to help you identify your most pressing financial focus.

In Part Two of this three-part series we’ll analyze expenses, spending habits, and goals.  Based on the results, we’ll make an actual budget for the month of May (again, if you’re reading from the future, don’t wait).  Finally, we’ll talk about course correction, giving grace, and my favorite free budget app!  In Part Three, we’ll figure out how to put your budget habit on cruise control.

Anybody else need a margarita after reading through all that?  Thanks for bearing with me.  I know that budget talk isn’t everybody’s cup of tea, but it really is so important.  If you have any questions or suggestions, please leave a comment!  If you’d like to reach out privately, go to the Contact section or message me on Facebook.  I’d seriously love to hear from you.