ABC’s of Budgeting

Budgeting or cash flow planning comes easy to some, but difficult to many. 

Prov 25:28 He that hath no rule over his own spirit is like a city that is broken down, and without walls.

Cash flowing planning is a means to control yourself, your habits, and your money.  Most people get to the end of the month, and wonder where are their money went.  A budget is a mechanism that allows you to tell your money where to go before the month begins.  Breaking the development of the budget into these simple tips is as easy as ABC.

1)      Account for all the money – When creating a budget start will all the anticipated income that your household has coming in for the entire month.  Put that number at the top of the page, and spend every dollar on the paper until you have zero left at the bottom.  We call this zero-based budgeting.  Assure that account for all your fixed, variable, and non-monthly expenses, as well as everything else you spend money on.

2)      Begin Planning before the month starts  – Plan to account for all the money before you get it.  It removes the emotion and stress when spending it on paper.  Some people do a budget, just after they get paid, but struggle to have family buy-in, completeness, and agreement on the budget.  And with the money in the account, it’s easier to just execute rather than plan. So complete the plan, then execute.

3)      Compute the weekly allocations – Most people get paid weekly, or semi-weekly.  So you need to know which paycheck you are going to allocate money for which expense.  Suppose you have a $1000 mortgage and get paid $1500 twice a month. You can either take the entire payment form one check or a portion from each.  Allocating weekly totals is just breaking the monthly plan into weekly or bi-weekly plans. 

Budgeting is a critical key to getting control and power over your money.  If you don’t budget, you may win with money, but you won’t excel.  Money is like an active dog, and the budget is the lease to keep it from just running away.

Do you have a monthly budget?  If so, do you have any tips to offer?  Leave a comment.