10 Steps to a Better Budget...(or Something Like That)

Oops! I totally forgot that I started a series of blogs about finances. Let me wrap that up for goodness sake...

In the previous blogs, I wrote that having a budget and sticking to it matters for so many reasons and I just can't say that enough. We have freedom to give only when we are good stewards of what God has given us! Being stable enough to help others requires sacrifice. Knowing where our money is going -every penny- and not having the expectation that we deserve to rise to a higher standard of living are a couple good places to start.

1) Make a budget with detailed categories, and project how much should be spent in each category.

2) One category should be a savings account (separate from your other savings account). This account should be for the things you know you will need to spend money on in the year, such as property taxes, or any bill that just comes once or twice a year, making it hard to put in a monthly budget. I add together all these types of yearly expenditures, divide it by 12, and put that amount in the savings monthly. Then we don't have to freak out when the car needs repairs, etc, because we knew it would happen eventually and we were (somewhat and sometimes!!) prepared.

3) Think about how much you're spending on health. It's an important investment, and there may be changes you can make to insurance, prescriptions, gyms, etc. to make it better and less expensive at the same time.

Okay, that was a re-cap. Now onto a few more ideas.

4) Stuff for our Kids: This is when it gets hard, and I struggle through this weekly, but here are a few things I'm trying to do. One, make a cash envelope, or at least a specific budget if not actually setting aside cash, for each child, to cover their birthday, Christmas, and other special holiday type gifts. Decide how much you think is appropriate to spend and only spend that much, and don't give in to picking up things for them every time you're at Target. Easier said than done, I know, but these are extras, non-necessities. We want to teach our kids to appreciate gifts because they aren't used to always getting what they want/new things. Two, make a Family Fun cash envelope or budget and decide at the beginning of the month how you'll spend it. When it's gone, it's gone. Find free activities after that! They need to see there's a limit. We don't have to say "Money doesn't grow on trees", we show them. Lastly, involvement in extracurricular stuff: I believe in investing in God given talents and I'm glad my parents did that for me. But doing one type of team or lesson at a time is a pretty good rule I've heard from a lot of parents, so kids have to choose and they put more value into what they're doing.

5) This one will be short and that is the "Bills" category. What are your needs and what are your wants? We should know the difference, right?

6) We have a miscellaneous category in our budget. It's a good and a bad thing! Good because life happens and there is just no way you can project everything that is going to be paid for in a month. But bad because things can really pile up in there. Haircuts. Stamps. Parking. If every penny has to be accounted for in some part of the budget, where does one put "$10 Dog Toy"? In Miscellaneous.

7) Giving: A couple things here. One, we don't give under compulsion or by any rules. As believers, we give to where we see the Body of Christ at work, because this and not a building is the Church! Second, I weigh a lot of things against the fact that sponsoring a child in a third world country, giving them food, shelter, education, safety, and opportunity to know Jesus, costs $35 a month. Whenever we take on some kind of monthly bill and it comes to anywhere near this number, I am thinking, "Hmmm...upgrade the phone or save a child's life?" I'm serious. This is the intensity that my poor husband has to live with.

8) Cash Envelopes. It's a Dave Ramsey thing and it's seriously worth it. Some people do it for almost everything, we do it for the areas of the budget where overspending is a habit: eating out, family fun, individual blow money. Sometimes if grocery starts to get a little crazy, I'll do the cash thing for a month or two to get it under control again. Like Pinkalicious' Mom says: "You get what you get, and you don't get upset."

9) Shopping. You know, it's inevitable that you're going to need some new things, but here's an idea...A friend of mine and I went a year once without buying anything new. I mean, we bought deodorant and stuff, but no new shoes or clothes or appliances or whatever. We bought only necessities for a year, and it was really fun. It made me consider how much money is spent that really didn't need to be spent. Ads are pretty powerful, and the fact is if there is an ad for it, you most likely do not need it. Notice how they don't make commercials for electricity, running water, and the most basic of clothes, cars, and hygiene products? Nope. The ads are for bigger and better and brighter, and they make you think its something you should get in on, but someone is rolling in the dough at our expense. (Don't get me started on kids toys or electronics!! The new models that come out every year with one tiny thing upgraded on it!! Makes me want to gag!!)

10) Last thing, make an emergency budget of what you absolutely could not live without and compare it to your existing budget. See how bad things could be? If you have no savings, I recommend living on the emergency budget until you have three months of that amount (your total emergency budget monthly needs) saved.

Well, I hope this wasn't too boring or annoying. Maybe everyone is already doing this and tons more, that's great! I just like to share what I'm learning, hope it helps!