Budgeting...

Let’s consider budgeting. There are different ways to do this but this is how I do it. (I am amazed at just how many people don’t do it at all, so this approach will be basic!) I use a spread sheet on the computer and before such devices came along I used a calculator and a pencil and paper! Either works!


You need to write down all your income and expenditure – the first mistake that most people make is not to do that! By not tracking everything you won’t know where you are financially, so write down everything that you spend so you really do know what your income and your expenditure is each month. Note - not what you think you spend, but what you actually spend. Most people are good at this to a certain degree – but when you get down to the fine detail, that’s another matter. It’s the 20% that you don’t record that’s the problem and will continuously take you into the red – these are normally not your set costs, not the regular payments that go out each month but those day-to-day spending decisions. That Starbucks that you buy each day...

Most of my income is spoken for. I receive my salary from the church – it comes in to our bank account and then monthly commitments go out. Most people ‘back plan’, (that’s recording everything as you spend) few ‘forward plan’ and decide ‘I have this amount to spend on that area – and only that amount’! Christmas can then come as a bit of a shock - and rather than having planned for it, they decide to have a ‘good’ Christmas and then pay off the debts afterwards. Rather than thinking ahead earlier in the year and making provision for Christmas shopping by setting an amount aside each month throughout the whole year they plough on into debt. The same principles would apply to financing our eldest son going to university – I thought ahead and planned financially more than a year ago rather than crashing into the harsh reality! Financially I have a monthly plan, an annual plan and a 5 year plan. Then there’s my 25-year plan. I do this because I am aware that the decisions I make today impact what will happen in the future.

Reconciling your bank statement with your recorded expenditure is important – to regularly check what is actually in the account and see if spending is on track. And if the bank has made an error (it does happen!) – the earlier you raise the issue with them, the better!

Content taken from King's Stewardship Seminar...