Budgeting 101: The Truths for Success

Rob StewartBudget, Financial Planning

I teach a biblically based financial seminar at churches and organizations. One of the things I have noticed that has been a resounding constant during these seminars no matter what size or denomination is the chuckles, and snickers that take place during the part about monthly budgeting. I hear people who have all but given up on the idea of budgeting, but I also find that they have never had realistic goals, or they have never been properly trained in how to have a budget work for them in their home properly. Here are some basic principles that you can apply to your life and find success for you and your family with a budget that will work. Not having a budget is the number one cause of families living paycheck to paycheck and having the downward spiral of NSF fees in our accounts.

First, we need to set realistic goals.

All too often, we make a budget that is so decisive that it leaves no room for play, or entertainment. Because of that, we usually loose track of the budget so we eventually give up. Most budgets end up in the trash because of improper planning from the time they are first created. ALL expenses should be accounted for including monies that we are going to spend on having fun. It is usually easy for us to know our set monthly bills like the mortgage and utilities. It is the ancillary expenses that we usually end up not doing well to plan for. We should have a monthly outlook budget that is supported by a more detailed weekly analysis budget.

Second, we need to be honest with ourselves about the true cost of our expenses.

If we know that we are going to the movies with the family, we will find ourselves budgeting the movie tickets, say at $8.00 a piece, but then we forget to budget the cost of the large pop corns, large drinks, and of course the Goobers, Jelly Bellies, and Sour Gummy worms that are also going to be purchased, which as we all know can add up to a real difference with the overall cost for the evening. Result= Budget Blown. We need to think through the true cost to the best of our ability when we are looking at doing something and having a budget to go with it. Now if we do find that an event ends up costing more than we really tried to plan, we simply go back to the budget and make corrections where needed. This sometimes means that we have to take from another place in our budget, which takes us to our next point.

We need to realize that a budget is not a rigid box with defined edges; a budget needs to be looked at as a living, breathing thing that changes as our life does. The key is to have one and to be working on it to make adjustments as needed on an ongoing basis. If we work with our budget it will work for us.

The last but most important thing we can do is to decide who should do the budget in the home.

The answer is simple. The detailed person in the home that enjoys numbers and is analytical by nature should be the one to do the budget. Sometimes this person has been referred to as the nerd of the family, (you know the one that wore the calculator watch in school, and had it set to go off exactly when the bell rang); that is your budgeter. Now the key here is to make sure after the budget has been created that it is then looked over together with your spouse and that necessary changes are made to where both approve of everything in it.
By following these few simple rules it brings both people onto the same page, and really puts you on the road to having success with your budget for your family. Without streamlined understanding there is not much chance of success. Remember that a house divided cannot stand. There are too many families in our world that are falling apart because of money, and the mismanagement of it in our lives. You can always take that first step toward a better tomorrow by starting somewhere. If you would like help developing a budget or need help in other areas of your financial life please give us a call or contact us through our email form.

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