The Budget... It's an Essential

Establishing a budget is an essential as you travel the road to financial freedom.  At the end of the month do you want your money to tell you where it went or do you want to tell your money where to go?  Dictionary.com defines the word budget as “an estimate, often itemized, of expected income and expense for a given period in the future.”  An accounting textbook defines budget as “a comprehensive financial plan setting forth the expected route for achieving the financial and operational goals of an organization.”  John Maxwell defines a budget as “Telling your money where to go instead of wondering where it went.”  In this blog we are going to define the word budget as “an itemized plan of how you are going to kick the enemy in the teeth in order to get out of financial bondage and live a God-honoring lifestyle that will not only bring financial freedom but financial peace.”

Keep in mind that your budget is not chiseled in stone.  You want to keep your budget flexible and know that it can be changed.  Your money is not the boss of you.  You are the boss of your money.

There are four necessities that you want to use as you build your budget.  These four areas are not negotiable and they are the first things that you pay every month.  They are important because without these 4 areas, you will not be able to handle the other areas of your budget.  The first necessity is shelter.  This area includes everything that is spent on housing, including your mortgage or rent, utilities and insurance.  You must have a place to live.  The second necessity is transportation.  You have a job so that you can pay your bills; therefore, you must have a way to get to your job.  This area can include all costs associated with owning and maintaining a car such as car payments, gas, oil changes and insurance or the expenditures for alternative forms of transportation such as bus fare.  The third necessity is food.  In order for you to effectively perform in your job and make wise decisions, you must provide your body and your family with nutrition.  The fourth necessity is clothing.  You need the necessary and appropriate clothing for your job and for general living.  Keep in mind that as you develop these areas of your budget, you do not have to be extravagant.  For example, in the housing section you may include cable as a utility but cable may be an expenditure that you can eliminate in order to develop other areas of your budget.  Do your best to develop these areas fully and wisely.

One final note about developing your budget…  If you know anything about dieting you have probably heard the advise to not eliminate the one favorite food due to the fact that you are more likely to fall away from your diet if you don’t have something to enjoy.  The same holds true for your budget.  Do not eliminate the one thing that will hold you to your budget.  This could be keeping cable or a monthly clothing option.  Please don’t risk blowing your budget and becoming hopeless because of the one thing that will keep you going.

Go for it and develop your budget for this month or the next month!  You can do it and you will be so glad that you did.  Please send any comments if you have questions or need assistance.