"Which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it ..." (Luke 14:28 NKJV)
We all know the importance of having a written budget, yet, many of us are attempting to run our financial lives without one. "A budget is people telling their money where to go instead of wondering where it went." (John Maxwell).
Earlier this year I was introduced to the works of Dave Ramsey, a great and gifted author whose books on money and money management has changed my world for the better. According to Mr. Ramsey, "you must set up a budget, a written budget, every month. You have to tell your money what to do or it leaves. A written budget for the month is your goal. People who win at anything have written goals. You wouldn't build a house without a blueprint, so why do you spend your lifetime income of over $2 million without a blueprint."
Putting a budget together is not difficult.
- step 1.- get a sheet of paper and at the top label it Monthly Budget
- step 2.- make a list of all your monthly expenses. This will include Tithe, taxes,Housing expenses, Food, Utilities, Insurance (life, health, auto), Outstanding debts, Entertainment, recreation, Clothing allowance, Medical/dental, and Savings.
- step 3.- List all your available income
- step 4.- compare your income versus your expenses (outgo)
Set up a new budget every month. Spend every dollar on paper before the month begins. Dave Ramsey advises folks to "look at this month's income and this month's bills, savings and debts and match them up until you have given every income dollar an outgo name. This is called Zero-based Budget"
It may all seem strange to you at first and maybe even a little scary but I promise you that doing a written budget and living by it will be your best step towards living a life that is debt free, frugal, simple and rich.
"The rich rules over the poor and the borrower is the servant to the lender" (Proverbs 22:7 NKJV)