Thursday, June 30, 2016

Tips for Managing Money



“But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.” Matthew 6:33

Avoiding financial problems will help give you the peace of mind to focus on the more important things in life. Different budgeting methods work for different people, but it is important to have some kind of system. The following tips will help you to become more financially responsible.

Make a Budget

The first thing you’ll need to do is write out a monthly master budget. List all expenses including your tithe, bills, groceries, gas, savings, etc. Don’t be a perfectionist during this step, or you might end up not writing down a budget at all. It’s okay to estimate in categories you aren’t sure about because you can update the amounts as you receive your bills. If you find that you are spending more than you make, you either need to cut back on spending or find a way to make more money.

Plan for Every Payday

Using your monthly master budget as a guide, write down a specific plan before each payday. Every month is different. Perhaps someone has a birthday or the car needs an oil change. Check the due dates on all of your bills to determine which ones need to be paid this payday, and pay those bills as soon as you get paid. Do not spend the remaining money, especially if you get paid more than once a month. Only spend the amount that your monthly master budget allows since some of this check might be needed to help pay a future bill. This may seem obvious, but people tend to be short sighted.

Keep Track of Due Dates

When it comes to writing down your master monthly budget and payday-specific budgets, you can either do this on paper, a computer spreadsheet or on the notepad app of your phone. Even if you don’t write checks or have a checkbook register per say, having some kind of record of when you paid each bill will help you keep track of approximate due dates in case a statement gets misplaced. This register could be right below your budget in your notepad app or spreadsheet since it’s best to keep everything all in one place.

Remember that Something’s Got to Give

If you go outside of your budget in one area, you will need to make that up in another area. For example, if you have to pay a speeding ticket this month, perhaps you can plan meals around whatever food is already in the pantry or spend less on gas by staying home more. Budgeting is about making choices because you can’t have everything.

Savings

Having at least a few hundred dollars in your savings account is important and will help prevent you from borrowing money. Build up this emergency fund even before trying to pay down credit cards. If you use money from your savings account, make yourself payments to build it back up as soon as possible.

Debt

Pay off credit card bills by paying the minimum payment on everything except for the one you are focusing on paying off. Some experts say to pay off smaller balances first for a sense of accomplishment, while others recommend starting with the one with the highest interest rate. Just be sure that you are making a larger payment on one of your bills. Once you pay off that first bill, use the extra money to make an even larger monthly payment on the next bill you want to pay off. In this way, you will build momentum, and your debt will decrease more quickly.

$200 is the New Zero

When it comes to your checking account, avoid letting the balance get too low. If you make a mistake, you don’t want to end up in a vicious cycle of paying overdraft fees. If you only have $200 in your checking account, then that should mean that you have no money left to spend. Keeping some kind of cushion is especially important if you are like me and don’t write down every purchase.

By taking a few minutes to look over your finances every day or every week, you will remember to pay your bills on time and avoid spending more than you can afford. There will likely be times that you don’t have all of your financial ducks in a row, but a little bit of planning will help you to be a good steward and decrease the frequency of financial problems.

“Be thou diligent to know the state of thy flocks, and look well to thy herds.” Proverbs 27:23

Here's a sermon to go with this article

4 comments:

Anonymous said...

Well said Pastor.

No matter what your income level, I learned as follows:

1. Tithe first (10%);
2. Save second (20%);
3. Spend last (70%).

I also learned to gross up everything to pre-tax level to "unhide" Caesar and put him in the last category where he belongs.

Anonymous said...

Should our tithe be based on 10% of our pre-tax income, or post tax income?

Anonymous said...

Personally, I base tithe on pre-tax income because I believe God comes before Caesar so tithes should not be taxed.

I base everything (including savings) on pre-tax income, which means that tax and other statutory deductions are reckoned as one of my expenses. That forces me to really feel the full impact of the state on my standard of living and motivates me to find all the ways to minimize my tax burden legally.

Anonymous said...

Thanks for the advice. I just find it hard to tithe 10% on pre-tax , because I don't feel like the taxes taken out are actually income to me. Maybe I just need to downsize our home and health insurance so that I am able to give 10% based on pre-tax ?