Why You Need to Keep a Household Budget
Are you avoiding looking at your bank account because you’re afraid of what will be waiting for you? Do you dread pay day because you know that you will have little to nothing left once all of your bills are paid?
We work hard to earn a living. We should make sure we spend the money we bring home wisely. That’s where a household budget comes in. It’s a good tool to see at a glance what we have coming in, what’s going out (and what that money is paying for) and if there’s anything left at the end of the month to put into savings.
Before we dive into exactly what a budget can do for us, let’s consider for a minute what will happen if we’re not tracking income and expenses. We may end up spending more than we’re making in a given month (or two, or three). Over time that can put us into some pretty hot water financially. We may also spend a lot more than we’d like to on things like eating out, going to the movies or new clothes.
Having a budget gives us more control over where we want to really spend our hard earned cash. Maybe that’s dinner and a movie, but maybe it isn’t. Wouldn’t it be nice to have a choice?
We are Called to Be Good Stewards
There are many references in the Bible that talk about being good stewards of what God has given us. Not just our material possessions, but our body, health, and finances.
Think about it. It’s God’s money we’re spending. He graciously provides for us in many ways. If we’re squandering what he’s giving us, he very likely won’t bless us with more. This article explains 10 financial principles that are rooted in scripture! I highly recommend the read.
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It Tracks Where Your Money Is Going
A budget simply tracks your money. You record where the money comes from each month (your income) and then write out everything you spend it on, starting with your 10% tithe (if you’re a Christian, you should be tithing!), regular monthly bills like mortgage or rent, car payments, utility bills etc. What’s left after all the bills are paid is your discretional income, but I HIGHLY recommend always having a buffer in your bank account and putting aside some for savings.
Helps You Identify Things You Waste Money On
Having it all in front of you in black and white helps you identify things you’re wasting your money on. KEEP YOUR RECEIPTS for any given month. At the end of the month, tally up how much you spend on “extras” that weren’t needed but wanted. How much did you spend at Starbucks? How much did you spend at Target? Identify the black holes where your money is disappearing to and start saving it instead of spending it.
It makes you reconsider if you really want to spend well over $200 a month on Cable TV or $150 on your large cell phone plan. Or how about that yearly magazine subscription to something you no longer read? Go through your expenses and reevaluate if this is REALLY how you want to spend your pay check.
Allows You To Be Proactive About Savings
Saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end of the month.
A budget gives you a chance to be more proactive. Set aside some money for savings at the beginning of the month, even if it’s just $20. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it.
If you kept your receipts, and you see that you’re spending $20 eating out or ordering a pizza, use that towards your SAVINGS instead of eating out! I promise, your savings will quickly add up!
Ensures You’re Not Spending More Than You’re Making
Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial well-being. Not only financial well-being but your emotional well-being. If you’re stressing out about how you’re going to pay off debt or pay your rent, having a savings account and a budget will give you peace of mind knowing that all of your needs are being met.
Sacrifice today so you can have a better future! You don’t have to live paycheck to paycheck.