Try this Simple 5-Step Plan to Take Control of Your Budget
Most of us aren’t in a Jean Valjean (Les Misérables) situation where we need to steal bread to stay alive. So we’ve probably always assumed we’re off the hook with the eighth commandment, as long as we’re not counting those grapes we used to snitch in the grocery store as a toddler. God’s commands tell us not only what is forbidden, but also what is required of us.
“You shall not murder” not only forbids us from committing cold-blooded homicide, but it also exhorts us to honor and respect life. Likewise, “You shall not steal” forbids outright thievery but also asks us to be wise stewards of our funds so that we do not force others to financially support us in our old age or in emergencies.
God in his providence regularly shows us great mercy and grace in our times of trouble, even financial trouble. The Bible repeatedly calls us to generously help others (Deut. 15:7–8). This generosity can come in many forms and often means financial giving. Yet, God’s generous love and the generosity of others doesn’t give us the freedom to ignore our responsibility to save and prepare for the future.
I started budgeting when I was ten years old, dividing my $2.50 an hour babysitting income into spending, savings, and tithing categories. You don’t have to reach a specific income before you can begin to benefit from tracking your money. When you don’t track how much is coming in and out of that checking account, it’s easy to fall into two dangerous extremes:
- never spending money because you’re worried you don’t have enough;
- spending too much money on things you don’t really need or want and then not having money for the things that add value to your life.
Both extremes cause anxiety and stress and can turn money into an unhealthy fixation—whether you have a lot or a little! The solution? You guessed it—start budgeting. There is an incredible amount of freedom and peace from knowing where your money is going. If the word “budget” sounds scary, think of it as a spending plan. The end goal is not just to restrict your spending, but to be a wise steward by understanding where your money can be used most effectively as you strive to live a life that honors God.
If you’re not sure where to start, try this old-fashioned pen and paper method for a few months:
1. Write down everything you purchase.
Write down everything you purchase. and how much you spent on it, including rent, groceries, phone bills, etc.
2. Categorize your expenses.
At the end of the month, categorize your expenses into general categories, such as groceries, home supplies, clothing.
3. Add up all your expenses and compare them with your income.
Add up all your expenses and compare them to your monthly take-home income (after taxes). If you are spending less than you are making, that’s awesome! If not, look at the categories with the biggest expenses and find ways to spend less on those things next month.
4. Add a savings category.
Commit to saving ten percent of your monthly income next month. You may need to decide where you will spend less money to make this happen. After two or three months, you’ll have a good feel for where your money is going each month and will have some savings for a rainy day.
5. Make a monthly spending plan.
The final step is to make a spending plan that you can use month after month to decide where you will be spending and what you’ll be saving. You can stick with the classic paper method or try out some online tools like Mint or YNAB that can help you categorize expenses and track spending.
Creating and sticking to a budget may mean limiting how many times you go out, or saying no to the dress today, but it may also mean buying a nicer dress in three months and being able to take care of the ones you love (and yourself) in retirement. Being responsible financially is one way to honor the eighth commandment.