Spending, we all do it. The question is, how do we do it? Do we spend without control? Do we spend more than we have? We are all guilty at one point or another of spending in a wrong way, or not considering the results of a purchase.
It’s not the end of the world if we have spending problems, but it is our job to honor and glorify God with money. Especially knowing that it’s His money to spend! It’s also not that hard to work on. There are many things in our lives that require focus and attention to create habits, yet creating good financial habits can be a fun process, and doesn’t have to be a boring one.
First, you must get yourself together and understand what you have. Follow this three-step process to begin taking the steps towards glorifying God with what you have.
Step 1: Know Your Finances
There are four things you must gather: Your Assets vs. Your Liabilities, and Your Income vs. Your Expenses. Assets are things like Bank Accounts, Investments, and Retirement funds. Liabilities are things like credit card debt, your mortgage, and loans. Start thinking of ways that you can begin to cut down your expenses, or decrease your liabilities. Make the most of your opportunities.
Your income is simply whatever you receive. Your salary, investment income, interest earned, or even rental income. Next to that, you compare your expenses…your mortgage, your insurance, your clothing, and eating out are examples of this. In looking towards the future of creating a budget, your Income must be greater than your expenses.
We know, we know. How many times can you hear that! But the truth is, you really need to work on this in your home. After doing these exercises, you will know what you have, and once you know this, you need to start living within those boundaries, and hopefully, well under those boundaries!
Step 2: Set Clear Financial Goals
Sit down for a family meeting, be open with each other, and keep these three things in mind…
Your “priorities” are more of the intangibles, or things you can’t have in hand – financial independence, early retirement, and giving more to the kingdom are all examples of this. After that, you need to know your “responsibilities” or the things you are obligated to right now. This includes your mortgage, car payments, loans. Lastly, you need to think about your “dreams”. These tend to be more of future aspirations.
After going through all of these, you and your spouse, or close friend, need to set down your future financial goals. These goals need to be measured and achievable. Figure out ways to start reaching those goals.
Step 3: Make Your Budget
The first thing to do when creating a budget is to find a software that it easy to use. Many Word programs will have their own built in budgeting templates, or you can find websites that are helpful in getting you started. Set categories in your budget that are consistent in your lifestyle. For example: Grocery budget, gas budget, vacation budget, entertainment budget. Set goals in each category and work towards achieving them while monitoring your spending. You will be surprised at how much you save doing this!
Work on cutting down the “wants” and not the “needs”. Sometimes you will need to sacrifice early on to have more saved later. Be real with yourself, and ask the uncomfortable questions. Do we really need this, or is it just a luxury?
You might think that all of this seems difficult and challenging, but don’t forget that the Lord loves to reward His faithful servants. Be diligent in honoring Him with your money, and He will shower unexpected blessings left and right!