Most people change their life by their appearance or by their careers or even through a spiritual conversion. All of this is good if there is a vision. A vision for your life creates direction, purpose and mission. Changing your life happens in four distinct areas: personal growth, family, health, and career. If you focus or change your life in these areas, you will see a great change. If you change any of these areas, you will change your financial future. Changing your financial future starts with a vision. To facilitate your personal vision in those four areas, you probably will need to have a financial budget. Good managed finances will certain impact the achievement in those four areas. One survey suggests that over 33% of people do not operate a budget properly. I have seen disastrous results of a non-working budget, i.e. bankruptcy, surmounting debt, frustration, pain and shame are just a few. Habakkuk 2:2 says Write a vision, and make it plain upon a table so that a runner can read it. A budget if operated correctly will guide, direct and even constrain you from splurging. It will cause you to run toward your end goal. Here are the most common reasons that many don’t operate with a budget: I don’t make enough money; I have too much debt, I have too many bills and it’s not worth it. I don’t handle money well therefore I am doomed to fail.
Know this: Your budget can resolve all of your concerns.
A budget should have three components: income, expenses, and net income. It’s just that easy. Let’s briefly discuss these components: Income comes in a couple of ways: planned or unplanned. Most would prefer planned but in some cases unplanned is what people are going through today. Planned income is the steady stream of finances on a weekly/monthly basis. Unplanned income comes at an infrequent rate. Examples of this are commissions, credit returns, and temporary pay from work being done and even unemployment wages. It is always good to know where you stand with planned income so that you can regulate your budget. If you have unplanned income, try to limit enough expenses during that period of time. Remember this: income is the most important aspect of the budget because the amount of income controls the amount of spending.
Now let’s look at expenses. I will try not to replicate the traditional principles of expenses here. It is good to write down all of your expenses as stated in Proverbs 27:23 – 24, Know the state of your flocks, and put your heart into caring for your herds, for riches don’t last forever, and the crown might not be passed to the next generation. Separate your expenses into three categories: Need, Want, or Desire. This will give you the confidence to win any battle with finances.
Work your budget first with the “Need” in mind. The need is a necessary expense for living (food, clothing, shelter, insurances expenses, and emergency fund/savings). The need is a “gotta have”. Work your budget with the need expenses and determine if your budget can be met. If your income does not exceed your expenses, then go back and work it until you have a surplus. There is a saying in Proverbs 10:22 which states, the blessing of the Lord makes a person rich, and he adds no sorrow with it. If there is something in your expenses that causes you pain and frustration, you may need to get rid of it. By doing so, freedom will come. Additionally, when your income is unplanned, always put some money away so when the rainy day comes you have it to pay those needed expenses.
If you have a surplus, work your budget with the “Want” expenses. The want is something above and beyond basic needs, better quality and better technology than the store brand. In most cases, the cost is higher (i.e. PDA vs. flip phone, name brand cornflakes instead of store brand – you get the picture!). You should be meeting your budget comfortably with the want expenses. Lastly, if you have a surplus, move on to the “Desire” expenses. These are expenses that will move you closer to the achievement of your personal goals. Within each category, there is a level of budget constraint that you should experience. This means that accomplishment is around the corner for your vision.
Finally the last section is next income. This is nothing more than subtracting the Need, Want, or Desire from your income. Executing your budget this way will change your life. You might not see the difference now but in 3 to 6 months you will see a change. You will begin to takeover your finances with a vengeance and change will happen immediately.
Here is a prayer to help you make it through budgeting: Father, please help me with my budgeting. Your word says that the righteous is never forsaken nor his seed begs bread. I commit my budget to you. Show me what is out of whack and out of order. Help me to balance my budget to balance and show me how I can become a good steward of finances, in Jesus name, Amen.
Cedric Dukes is an ordained deacon, author, speaker, and columnist. His book, Hostile Takeover – Manifesting God’s Plan and Purpose for Your Finances, has changed the way people think about finances and has been featured nationally. You may contact him at www.cedricdukes.com.