Money wise – with a budgetCLF
“I hit the jackpot”, John shouted. “R480 000!” To his surprise not only his money became more overnight, but also his friends (Proverbs 14:20, 19:4 and 6). It made John feel important. He left his job, lost his principles and started buying everything his eyes saw and heart desired. He scarcely tasted the wealth or it was gone; it sprouted wings and flew into the air like an eagle (Proverbs 23:4-5). Oh dear, if John just remembered that knowledge is more important than possessions (Proverbs 3:13-15). Or the words of Proverbs 13:11: Dishonest money dwindles away, but whoever gathers money little by little makes it grow. He also forgot Proverbs 28:20: A faithful person will be richly blessed, but one eager to get rich will not go unpunished.
The reason why John’s riches disappeared just as quickly as it came, is because John did not learn to manage his monthly income responsibly. When he got a great sum of money overnight, he did not have the knowledge or the skill to use it correctly.
Stop dreaming about all the things you are going to buy when you perhaps one day obtain lots of money. Rather use your time and strength to learn now how to correctly use the money that you already have today. If you manage to do that, your money will slowly but surely grow (Proverbs 13:11).
The first and most important thing that you need to do is to think ahead and to plan what you are going to do with your money each month. This advance planning is called a budget. How do
you do it?
Step 1: Make a list of all the things that you think you spend money on. There is a list at the end of this text to help you. Can you think of something else?
Step 2: Gauge to grasp! For three months, write down what you do with ALL your money. You have to do it immediately as soon as you buy something, otherwise you will forget. Use the list at the end of the pamphlet. Most of your expenses will fall under one of the sections.
Step 3: Learn to use the calculator on your cell phone to add, subtract, multiply or divide amounts. If you do not know how to do this, ask someone to teach you.
Step 4: Add all the amounts under each expenditure and divide the total by three (it is the number of months in which you wrote everything down). Now you know what the average amount is that you spend on food, clothes or transport each month. You now know what you did with your money.
Step 5: Take a careful look at how much you spent on what. Do you like what you see? Did you spend most of the money on the most important things or did you waste money (for example, on smokes and liquor)? Do you think you can spend your money better?
Step 6: Keep in mind how much money you spent on average on each item on your list over the three months. Decide how much money you WANT to spend on each item. Write down the amounts. You are money’s boss, of course! Money is not your boss.
Step 7: Add all the amounts and make sure that the total is not more than you earn each month. If it is more, you have to scale down the amounts in a few places so that your total is less than your income. Don’t try to spend nothing in one place. It usually doesn’t work.
Step 8: See how feasible your budget is. If, for example, you budgeted R1 000 for food, you have to divide the R1 000 by the number of people in your household. Then divide it by the number of days in the month. If it is 6 people, your sum will look as follows: R1 000 divided by 6 people equals R166,66 per person per month. Divided by 30 days per month, it comes to R5,55 per person per day. Divided by three meals per day, it is R1,85 per meal. that means there is only R5.50 per day or R1:85 per meal available for each person. Then the question is: Can you let someone eat healthy, balanced meals for R5,55 per day? Do the same with things like clothes, and so forth.
Step 9: You have now planned your expenses according to your income. Congratulations with your budget. It is the first step to financial freedom and prosperity. Now you must continue to write down every time you buy something. Stick to your budget. Do not spend more money on something than your budget allows. If it happens, you need to decide on what item you are going to spend less than you budget allows so that your total expenditure still is less than your income.
Step 10: Adjust your budget regularly. If, after a few months, you see that each month you spend more than your budget on a certain item, adjust your budget. Increase the amount for the specific item. Then decrease your budget for other items with the same amount. You also need to adjust your budget when your circumstances change (e.g. when a child is born or leaves the house, you get a raise, you move house, and so forth).
Step 11: Think about the advantages of a budget. Do not stop working according to a budget. It helps to decide beforehand what you are going to do with the money. It helps you with financial discipline. It helps husband and wife to be honest with one another and to account to one another. People who don’t work with a budget usually act on an impulse and spend money on things that are nice, but not necessary. They waste a lot of money. At the end of the month they cannot give account of what they did with all their money. If you can give account of what you do with all your money each month, it can also help you in discussions where wages are negotiated. Discuss your budget (income and expenses) with your employer.
I grew up in a house where there were many bottles with money in the passage cupboard. Mom and Dad decided beforehand how much money they could spend on what. Then they faithfully put away the correct amount in each bottle. Let’s use five imaginary bottles. Make sure that you put money in all five bottles. Most people have no financial discipline and spend all their money each month. The first four bottles remain empty and they remain poor.
Thanks offering (First bottle)
Thanks offering for your church and the building of God’s kingdom. Matthew 6:33, Matthew 22:21 and 3 John: 5-8
Offerings (Second bottle)
Support for family and friends, as well as other needy people. Acts 20:35, Ephesians 4:28 and 2 Corinthians 9:1-15
Save (Third bottle)
Save (general and/or for something specific you want to buy or do)
Provident fund contribution (or any other provision for your old age)
Provision for the further training of children (free schooling ends in grade 9)
Education and training for yourself (to get a driver’s licence or follow a course)
Proverbs 6:6-9 and 31:10-31, Ecclesiastics 11:2
Invest (Fourth bottle)
Invest money in things that grow in number or value or that earn interest.
Proverbs 13:22 and 31:16, Matthew 25:26
Spend (Fifth bottle) 1 Timothy 5:3-8
Food and consumer goods (to eat healthy and balanced, buy cleaning agents, toilet paper …)
Clothes and shoes for the whole family
School (school clothes, school fund, hostel fund, sport …)
Household items (furniture, blankets …)
Electricity (fire wood, gas, coals, paraffin, candles)
Communication (cell phone or telephone / postage)
Medical expenses (doctors, visits to the clinic and hospital, medication)
Transport (fuel and motor maintenance or money for a taxi)
Family affairs (weddings and funerals, as well as travelling costs to that place and contributions for that purpose)
Sport, recreation and leisure-time activities (TV licence, bicycle, sport gear and clothes, transport …)
Alcoholic beverages (beer, wine, homebrewed beer)
Smokes (cigarettes, tobacco and/other drugs)
Debt (all types and sorts of debt, e.g. on furniture, clothes)
Leave and holiday (even if you only visit family that stay far away)
Housing (maintenance of everything in and around the house, as well as provision for the time after retirement)
Books, gifts (magazines, toys for children)
Other expenses of which you haven’t thought.
Most people don’t know how much money they waste on smokes and liquor. You need to gauge to grasp. Smokes and liquor keep people imprisoned in poverty and harm their health. Read what the Word of God says in Proverbs 23:19-21 and 23:29-35. Get help and get free!
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