Set up a Budget
Last month we focused on paying tithing, saving receipts and tracking expenses. This month we take the next step and set up a budget.
- Pull out last month’s records and evaluate them, taking notes as you go along. First, remember the axiom, “spending fifty dollars a month less than you receive equals happiness and spending fifty more equals misery.” Based on last month’s spending, in which direction are you headed? Look at the specifics: are you happy with where your money went or are you shocked by some of your final numbers? Are you living as frugally as you would wish or can you see room for improvement? Write down ideas for reducing expenses as they come. This is often inspiration!
- Decide how to set up your budget. Again, it doesn’t matter how you set it up, just find what works for you. Here are just a few options: **
- Purchase or print paper worksheets: Dollar Times LDS.org Tipnut
- Use a prepared budget template: Microsoft Excel Open Office Family Budget Worksheet
- Purchase or download personal budgeting software
- Call to see if your bank or credit union has an online budgeting program
- Use the envelope system
- Based on last month’s records and your notes as you reviewed them, prayerfully set up a reasonable monthly budget in this order:
- All sources of income
- Tithing and taxes
- Required inflexible expenses (rent, mortgage, debt payments, court-ordered payments, insurance, etc)
- Required flexible expenses (electricity, water, sewer, gasoline, food, clothing, savings, etc)
- Discretionary spending (entertainment, cable, subscriptions, vacations, gifts, etc)
- Establish regular Budget review times. How often to review budget depends on your and your spouse’s spending habits. If you spend small amounts on a daily basis, you will need to review your budget at least every couple of days. If you tend only to do one or two shopping trips weekly, once a week should be adequate. If you shop only a couple times monthly, you can get away with still less frequency. The key question is: Do I know how much I have left to spend before I make a purchase? If the answer is, yes, you are reviewing often enough; if not, you will need to increase the frequency.
- Pray for help. Establishing new habits and exercising self-discipline is difficult and you may want to throw in the towel at some point along the way. You will need His help. The Lord is not neutral on finances. Money is a stewardship given to us to learn faith, self-control, service, consecration and many other Gospel principles. He intends us to use it wisely and well to build the kingdom and bless our lives and the lives of others. Pray to remember these things and to act in accordance with this knowledge.
- Do it! Print up your pages and put them in a binder, save your spreadsheet to your desktop, fill your envelopes and go. If you are not initially 100% successful, that’s fine. Pay attention to where you have done well, say another prayer and resolve to do better tomorrow. Remember that you have not failed as long as you have not given up. New habits can be established and you will see miracles in your finances as you continue on!
**Please exercise caution in selecting the companies, software firms, etc that are allowed access to your financial records. As far as my Web protection software could tell, the links I have included are all safe, but please take some time to prayerfully research them, particularly if they will have access to account numbers, Social Security or other id numbers. Identity theft can be a major financial blow to an individual or family!