Budgeting According To The Bible

If you are going to get debt free the next step is to write a budget. A written plan. As much as people groan at the thought of writing a budget, it is important to do so. A budget is your road map to get through your financial life.

1. A budget is even Biblical. In Luke 14:28-30 Jesus tells us,“Suppose one of you wants to build a tower. Will he not first set down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able finish it, everyone who sees it will ridicule him, saying, 'This fellow began to build and was not able to finish.'”
   A. When starting to budget it is important to remember God. That is why the first lesson was God vs Debt. Proverbs 21:5 tells us, “The plans of the diligent lead to profit as surely haste leads to poverty.”
   B. The first step in your budgeting is to figure out how much income you have. At this point it doesn't matter what you spend. Because you need to get to the point where what you spend is based on what your income is. You cannot do that until you figure out how much you have coming into your budget.
   C. It is important to list all of your gross income, including all commissions, bonuses, tips and interest that you will earn over the next 12 months. If you have a fluctuating income like those on commission you should use a low yearly average, dividing it by twelve (12).
   D. Once you determine how much income you have, you need to plan on giving the first 10% to God. Deuteronomy 14:22 says, “Be sure to set aside a tenth of your fields produce each year.”
   E. Some will say, “Okay, but that doesn't say it has to be the first 10%.” However you have to look at the Bible in whole. Other verses like Exodus 23:19 says, “Bring the best of the first fruits of your soil to the house of the Lord your God. There is no question God wants us to give to Him off the top. 2 Corinthians 9:7 says, “Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” He is to be first in our lives and that includes our finances.
2. Now that we have our tithe figured out; we can focus on the rest of our plan. As someone named Anonymous once said, “people don't plan to fail, they fail to plan.”
   Time to look at taxes. I know you hate them as much as I do, but they are part of our life.
   A. Then Jesus said to them, “Give to Caesar what is Caesar’s, and to God what is God's.” - Matthew 22:21
   B. Whether it be withholding taxes, social security or state and local taxes they must be deducted from your gross income. If you are employed by someone else, this will already be done fore you. If you are self-employed you must remember to set aside money for your quarterly payments.
   C. You have to be careful though. You cannot treat unpaid tax money as a windfall profit.
   D. Before we move to the next category in budgets we need to address other deductions that you may have in your paycheck. Deductions for such things as insurance, automatic savings deductions, retirement, union dues and other items that may come out of your check before you receive it may be treated in one of two ways.
   I. You include them with your taxes when you figure your tax deductions from your gross income.
   II. Or you can include them in your spendable income and deduct them from their proper category (which is the preferred option by most personal finance gurus).
3. After tithes and taxes your your family needs to come next. 1 Timothy 5:8 says, “But if anyone does not provide for his own, and especially for those of his household, he has denied the faith, and is worse then an unbeliever.”
   Such expenses as
   A. Rent or Mortgage
   B. Home (or Renters) insurance
   C. Utilities
   D. Maintenance (and)
   E. Savings
   F. Groceries (including paper and non-food items normally bought at grocery stores)
   are all necessary expenses that make up taking care of your family on a daily basis. However, eating out is NOT a necessary expense. As such would not be included here.
4. Next is automobile expenses. Here you need to be sure to include any
   A. Car payments
   B. Insurance
   C. Gas
   D. Oil
   E. Maintenance (and)
   F. Savings
   Here (like in the housing section) there are two purposes for the savings in this category.
   A. First, eventually the vehicle will breakdown. It will need a new fuel pump, transmission or some other repair. Those “unexpected expenses” are not unexpected. They are unplanned. You know eventually they will need replaced or repaired, so make them part of your plan. By setting aside a little every month you can be prepared when those pesky “unexpected” expenses arise.
   B. Second, the amount set aside needs to be a sufficient enough to replace the car every five to ten years, so you can pay cash for it.
   C. Finally, annual or semi-annual insurance payments need to be set aside on a monthly basis.
5. That brings us to the insurance category next. This category includes all insurance except home and auto, which are included in their own respective categories. Like we discussed before all annual or semi-annual insurance payments should be set aside on a monthly basis.
6. After insurance comes categories to pay your debts, entertainment/recreation, clothing, emergency fund, medical expenses, holiday/birthday gifts, school/child care, retirement and investments.

Conclusion

This process will show you that you cannot budget every line. It simply isn't possible on most budgets. However, you will have something in most every category. Subtracting expenses from you net spendable income. If expenses are greater then income, you need to figure out what expenses can be cut out. For example is it necessary to have cable?

It may be difficult to give up some of the luxuries that we love but we have to if we are going to follow God's plan for our budget (and lives).

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