Are you budgeting your income and expenses effectively?

Are you budgeting your income and expenses effectively?

Practical wealth building principle:

I want to encourage you to set up a BUDGET and stick to it.

Having a BUDGET is all about planning and managing your finances. As the saying goes, “Failing to plan, is planning to fail”.

A budget helps to ensure good cash flow. Without a budget, you will not know what is happening with your money and you may end up in huge financial trouble.

I would therefore suggest that you form a good habit of setting up a BUDGET. This will ensure that you have enough income to cover your expenses.

Within a budget one needs to weigh up expected INCOME against anticipated EXPENSES.

Once a budget is set, it is important that one aims to stick to the plan to avoid any potential cash flow crisis.

What is a budget?

Quite simply, a budget is an itemized summary of likely income and expenses over a given period.

It is a tool that helps you prioritize your spending and manage your money.

There are only two ways to have a positive balance when budgeting – increase your income, or limit your expenses.

By planning and monitoring your budget, you will be able to prioritize what is most important, as well as being able to identify where you are wasting money.

How do you create a budget?

The easiest way to budget is to set yourself a goal. Put a workable plan in place.

Try to establish what happens to your money.                                             

Draw up a spreadsheet of all your income to establish how much you earn.

• Draw up an expense’s spreadsheet, because before you can manage your money, you must know how you’re spending it. Get into a routine of recording your expenditure daily.
• Make sure that you spend less than you earn.
• Put God in your budget, and don’t forget to build savings into your budget.
• Make it a habit to stick to your budget. In the long run you will see the fruit if you follow through.

There are many items you need to include in your budget, such as…

• Household Expenses (rent, rates, electricity, etc.),
• Food & Clothing,
• Transport (car repayments, petrol, etc.),
• Communications (telephone, internet, etc.),
• Schooling,
• Entertainment,
• Insurance,
• Incidentals (coffee, magazines, etc.) amongst other items,
• Savings and Investments,
• Don’t forget to put God first. When you do, you set yourself up to be blessed.

Priorities:

Many manage their money the wrong way round. I would suggest that you get your priorities in the right order.

I would propose that you get your order right…

1. God first
2. Savings and Investments
3. Living expenses (Housing, food, transport, schooling, insurance, communication)
4. Luxuries (Entertainment and clothing etc.)

Stick to your plan:

Budgeting is all about the IN’s & OUT’s – your INCOME & EXPENSES.

Once a budget is set, it is important that one aims to stick to the plan to avoid any potential cash flow crisis.

Proverbs 21:5 “Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty”

If you earn less than you need, your cash flow will be in trouble. If you spend more than you earn, you will be in greater trouble. So, what is the solution?

You need to spend less than you earn, and aim to build up savings in your budget.

So, we encouraged you to…

• Create a budget
• List your expected income and expenses
• Review your expenses and manage your money well
• Try to eliminate wasting money.
• Be disciplined. Keep a tight control on your money.
• Avoid debt
• Live within your means.
• Put God first in your budget
• Don’t forget to also build savings into your budget – this will set you up for a brighter tomorrow!

Proverbs 14:15 says, “The wise are cautious and avoid danger, fools plunge ahead.” 

Interesting fact:

The ATM was the brainchild of a Scottish inventor John Shepherd-Barron. He came up with the idea while he was having a bath. He pitched the idea to Barclays Bank and the machine, once built, was installed in London in 1967.

53 years later we still us ATM machines. I wonder if this will still be the case in 10 years from now.

It is amazing what ideas we may come up with as we relax and let our creativity flow. Why not take some time out to be creative? Maybe you will come up with the next small idea that can have a big positive impact on the future.

Dare to dream. Aim high. I pray that God gives you an idea that can be a blessing to the world!  

Power quotes of the week:

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” —James W. Frick

“You must gain control over your money or the lack of it will forever control you.” —Dave Ramsey

What does God have to say:

Jesus said in Matthew 14:28… “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.”

So, set up your budget. Count the cost!

Let’s pray

Father, thank you for your provision. Please give me wisdom to manage my money well by sticking to a budget. Please help me to honor you and to make wise choices. Please help me to get my financial priorities sorted out in the right order. I ask for your blessing and for breakthrough in my money matters. Thank you, Father, that I do not have to face life alone, but that you are with me through it all. I ask these things in Jesus’ name. Amen.

Conclusion

I challenge you to put God first, to save before you spend, and to live within your means. You can set yourself up for a brighter financial future by sticking to your budget.

God bless you.