MoneyWalk 69: Start Budgeting

This program will help you undo financial bondage.

Godly stewardship requires that you consistently spend no more than 70% of your net monthly income. Net income is the income that you are left with and get to decide how to spend and save after federal, state, city, and payroll taxes are taken out of your gross income.

The 70% is less than the amount that most people regularly spend as noted by the anemic savings rate in the United States and the ever increasing amounts of debt being taken on via mortgages, home equity loans, car loans, student loans, and credit cards.

Making 70% of your net pay the maximum amount that you will spend level allows you to consistently tithe based on your gross income, give an offering each pay period, and save and invest a reasonable percentage of your net income to cover emergencies and retirement from your current profession as you move into re-fire-ment for the marketplace ministry that God desires you to use your gifts, talents, and skills to greatly impact.

When you plan to live like this and work your plan, you’ll have more peace and joy in your life and focus more on positively building the relationships need to have you’re your spouse, children, and friends. Limiting yourself to this spending pattern will help you stop the assault that debt brings into your life. It also helps you save and invest more and helps you avoid the negative consequences of bankruptcy, foreclosure, repossession, and low credit scores.

Write down your monthly after-tax income from all sources. As part of this process, talk with a friend, who understands budgeting, tax rates / returns, and biblical money management principles. This person can help you identify the correct amount of income to identify. He can help you understand the budgeting process. Also, if you allow him, he can keep you accountable to following biblical money management principles in the stewardship of your money.

Now, subtract your tithe and offering (ten plus % of your gross income). Offerings are free-will in nature and thus you get to choose the amount that you will give. Therefore, the plus % could be any amount more than 0% of your net monthly income. I’m confident that, as you consistently give to your local church that spreads the gospel through planting and watering the Word in people’s lives, your offerings will increase steadily because you will see and hear of the great returns of people at home and abroad having their lives positively changed from hopeless to hope-filled. All of this will be a result of your having stored your treasures in Heaven via your regularly planned tithe and offering.

Now subtract 10% for emergency savings. Put this amount in a high-yield savings, checking, or money-market account that does not charge monthly fees. You may need to establish an account with a credit union or internet bank covered by the FDIC or NCUA in order to get the best possible return on your money. This money should only be spent for emergencies and expenses planned well in advance with an eye toward making sure you build an amount equal to six months of your net monthly income and maintain at least that amount at all times thereafter.

Now subtract 10% for investment in your 401k or similar retirement or brokerage account, so that you will be able to build up a nest egg over the years that can help you be in a position to retire and re-fire at a reasonable time down the road without having money woes. If you have a load of debt with interest rates that are keeping you in hock, then you should take the next step before this one and use this 10% to pay off your debts and commit in your heart to stop taking on debt. Determine to start living debt-free.

Subtract the minimum monthly payment for each bill (home, car, student loan, visa, utilities, etc.). This leaves your disposable income, which is the amount that you should use to pay more money each month on the lowest balance debt with the highest interest rate and on personal expenses (groceries, gas, entertainment, personal grooming, clothing, etc.). After you have paid off the first account, then move to the next lowest account with the next highest interest rate. This is called using the debt snowball to more quickly reduce and eliminate your debts.

Repeat this process for each of the next six months and make sure your non-emergency spending stays within the allotted amount each month. An initial budget takes 4 - 5 hours to complete. Afterward, it takes about an hour every month to review your progress, revise bill payments / totals that differ from your estimates, and create a new budget for the 7th month and on into the future.

Please email any questions and pray for this ministry. May God bless you richly as you follow His plan!!!

Proverbs 27:23-27, Habakkuk 2:2-4, Luke 14:28-32, Philippians 4:11-13

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