“Be diligent to know the state of your flocks, and attend to your herds.” Proverbs 27:23

Learning how to budget is one of the top concerns we hear.

Budgeting means many things to many people.  Most people would tell you they budget.  What they mean is they know that money came in, and money went out, and the lights still work.  Or they may mean that they know how much they spent on car insurance last month.  This isn’t budgeting.  This isn’t spending on purpose.

1. Big Rocks First

A college professor once showed his class a glass jar.  He then put in a few large stones that reached the top and asked if the jar was full.  The consensus was affirmative.  He then added several smaller stones that filled the voids and asked the same question with a similar response.  He continued this pattern by adding sand to fill yet more voids and finally water to completely fill all voids.  The moral of the story was that much more can fit in the container if we get the big rocks in first.

Learning to honestly identify and appropriate for necessities is the first step in learning how to budget. Take a step back and decide what your true needs are, aka “big rocks”(food, transportation, and shelter) and what falls into the secondary needs (non-emergency but still important items), aka “smaller stones” category. Lastly, the fun and discretionary items (treats, eat-outs, extracurricular, non-essentials) are “sand.” They come last, umm, let’s be clear….not first as much of our culture tries to dictate.

2.  Just Pay Attention (start with the next 30 Days!)

Most of learning money management is simply paying attention.  When coaching people who aren’t living on a budget, the first thing we request is that for the next 30 days they don’t change anything!  Now you are wondering if we should be fired.  That’s right; don’t do anything differently for the next 30 days except writing on paper everything you spend.  Every single penny that leaves your house should be recorded on paper.  Don’t change anything.  When coaching others this does two things; it helps us see where the money is going, but most importantly it helps the people trying to get on a budget see where the money went.

One lady told us that she did this once and became physically ill when she realized how much they spent eating out that month.  You may find why Starbucks has been such a successful company.  You might be their primary supporter! The Bible says in Proverbs 27:23 “Be sure you know the condition of your flocks, give careful attention to your herds.”  It sounds like Solomon understood the value of carefully attending to what we have been given.  When your money, um… “your herd” starts to wander off, you go re-establish boundaries and regain control.

3. Zero-Based Budgeting

After your 30 days are up it is time to create a budget. Grab that pencil and paper! No fancy spreadsheets are needed unless that’s your thing. Zero-based budgeting is appropriating funds for the thing that is the most important first, then the next most important thing and then the next.  A budget isn’t saying that you must do 50 things next month so let’s see how we can make them all fit.  It may be that to some of those things we have to use a word long forgotten in our culture… “No.”

4. Your First Line Item: Tithing

Tithing is 10% of your income given to your local church and is instructed in Malachi 3: 8-12. This sounds insane until you see how God works! If you want to “do money God’s way” and receive His blessing in your finances, this is key to the whole plan! Every time we teach this we search our hearts to ensure we haven’t deviated from the tenant that if we could only have one line item in our budget it would be to pay God first.  We aren’t saying this to sound sanctimonious or super spiritual, it is simply that we are totally convinced that when we tithe, God is scripturally obliged to take care of our family.

Matthew 6:33 says, “But seek first the Kingdom of God and His righteousness, and all these things shall be added to you.” We say this should be the first line item in the budget for a reason.  When you put the Kingdom of God first, the rest turns into details that God promised He would handle.  This doesn’t mean we can make the rest of the budget consume 150% of our income, and God will pick up the check.  It does mean that when we are wise stewards of God’s money, and we give God the most important place in our budget we have unlocked the windows of Heaven over our lives. This doesn’t come easy for most, but believe us when we say you will not regret trusting God with your money!

5. Finish The Budget For The Rest Of The Month

Next, leave a space in your budget to “pay yourself.” We will discuss what this means later, but for now, leave a blank that you’ll return to later. What is the third thing we would do if we could only do one more thing? You will probably want to include food, shelter (the mortgage), and clothing next. Carry out the rest of the budget with everything you can think of that you’ll need to pay for on paper so you have a plan for the month!

6.  One More Thing if You Want to Learn How to Budget…

This first budget will STINK! Yes, you heard that right!  There is little chance you’ll nail this the first time so give yourself grace. This will likely take a few months of tweaking as you learn this budgeting thing one step at a time. Each month you will make a new budget and tweak accordingly.

Keep reading to find out how to actually stay on a budget! Check out our Resources: Freebies tab for budgeting templates. Not only will you find a monthly budget template, you will also find a large expenses template. This will save you so many headaches and help you prepare for those large expenses that occur once or twice a year! Tax bills, insurance payments and Christmas gifts no longer have to hit you as a surprise! You’ll be prepared as you save a little each month towards these!