It Pays to Have a Budget

The beginning of a new year is the ideal time to get your house in order, especially financially. In January, you start thinking about your income taxes and wondering where all the money went that you made last year. Maybe it’s on an upcoming credit card bill from Christmas spending, or maybe you have no record at all of where it might have gone. Either way, you realize it’s time to create a budget. 

The word budget seems to carry with it a negative stigma comparable to words like recession, downsize, or ration. But if done correctly, a budget is actually a positive action. Think, for example, balance, security, or organization. A budget will ease your stress and let you see exactly where all your money went (and where it should be going). 

It’s important to remember that a budget is personalized to fit your own monetary needs and expenses. Here are some basic steps to creating an effective budget: 

*Track all of your necessary living expenses. Look back over last month’s bills. If you do not have a record of these expenses, keep up with the current month’s bills. Even better, if you have statements for several past months, you can take an average cost of each bill. In addition to actual bills, you will want to include routine expenses such as gas and groceries. You may also choose to include an estimate for what you would spend on gifts throughout the year. If not, this will fall under your savings category. 

After you have approximated the amount of each bill, you can write it out for your budget. Now you will know how much it costs for you to simply live. This will also help you identify any unnecessary bills that you might want to cut out after finalizing your budget. For example, you may need to give up XM radio to help free up money to pay off a credit card bill. 

*Track all of your unnecessary reoccurring expenses. Think of how much you spend each week on nonessentials such as eating out, going to movies, drinking lattes, or buying newspapers. Then, think beyond a week for other unnecessary expenses. Do you get a manicure every two weeks or pay a monthly gym fee? If so, then divide those expenses to see how much money goes toward these each week. It is best to give yourself a weekly allowance for everything so you will not feel tempted to spend your entire monthly allowance for "extras" in one week! Your unnecessary expenses are the best category to cut down on if needed. 

*Track all of your charitable and ministry expenses. If you are not currently giving back some of what God has blessed you with, then it is time to start. God promises that if we will tithe unto Him, He will honor our obedience (Mal. 3:10). Giving is vital to our lives. We should want to obey God and bless others. You may think giving will put you behind, but give tithing a try and see what happens. 

Pray about what and where you feel led to give. Mark out a monthly or weekly amount in your budget—and stick to it. 

*Set aside an amount to save. As the saying goes, you should spend some, give some, and save some. We’ve taken care of the spending and giving, so now it’s time to focus on the saving. Come up with an amount that you can comfortably save every month. Maybe you need to start out small to catch up on your bills and giving. Or maybe you can cut down on some unnecessary expenses in order to start saving money. 

It’s important to have a savings account. When something unexpected comes up, then you will have the money to pay for it up front. Wouldn’t it be nice to pay in full to put new tires on your car or to have your plumbing fixed? You will feel a lot more freedom paying for these things up front instead of having to make payments with interest. 

Now that you have your budget, there are several ways you can carry it out. You may choose to cash out a certain amount of your paycheck for your unnecessary items or even ministry and charity giving. It is easier to save money if you have it automatically transferred from your checking to savings account each month. Regardless of how you choose to carry out your budget, the important thing is that you stick to it!


Kaci Lane Hindman works as the Production Editor for The University of Alabama Press.