Live Within Your Budget

QUESTION: What does it mean to live within your budget?

ANSWER:

To live within your budget simply means that outflow or expenditure does not exceed income. How is this possible today? It takes discipline. That means that instead of giving in to the idea of keeping up with the Jones or allowing the acquisition of things to steal away solvency, one makes the choice to forgo instant gratification with a view to a long term goal.

Many people have a hole in their pocket through which their cash falls. They do not know what they have or what they spend. Keeping track of every penny spent for even one week is a real eye opener. Setting a budget and seeking to live within it means that we limit ourselves now in order to achieve the worthier goal of monetary solvency.

One of the first steps that must be taken in the pursuit to live within one’s budget is to make a list of real needs and the realistic costs of those needs. It is essential to distinguish wants from needs. We must recognize that wants are those things which are expedient, while needs (such as housing, food, and essential clothing) are not.

The next step is to control spending by keeping track of what is spent and on what it is spent. If our expenditures exceed our income then there has to be some "belt tightening" in order to bring these costs into line. Again, this is simply a matter of exercising self-discipline. Merely earning more money does not make the difference; it is the management of the money that we have that is the issue.

Those who successfully live within a budget use their money rather than allowing their money to use them. When setting up a budget there are two essential items that must go at the top of the list. The first is to set aside money for charity. Many people give a tenth of the gross income back to God. This is a principle known as tithing that has been proven time and again. When one gives the tithe to the LORD, the rest of the 90% goes farther based on the principle that we cannot out-give God. "Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you" (Luke 6:38, NIV).

The next step is to create a savings account in which some money will be put away for long-term goals. How do we save? Again, it is a matter of self-discipline. For example, many people cut coupons or use rebates to save money on purchases. It is amazing to note how much money these practices can save on purchases each week. Once the habit of saving a little is started, it becomes easier and easier to do.

Another good use of money is to have one major credit card for which the balance is paid off each month. This is an efficient practice for keeping track of expenditures, while also serving as a way to build up a good credit history.

If you have a house payment, another example of a good money use is to pay an extra amount toward principle each month. Even a small amount each month shortens the length of the loan and saves interest that is paid to the lender.

The point is that living within your budget is accomplished through a series of choices which builds up the self-discipline needed to stick to that budget and stay the course. From this point-of-view, the principles of giving to God first and seeking to live a life that brings glory to Him serve as the plumb line by which we determine how to spend the money that He blesses us with.