I know some of you have questions about how, as stewards, we are to manage the resources that God has entrusted to our care. Managing God’s money is one area where we usually struggle. Dave Ramsey’s Book, The Total Money Makeover, contains information you need to answer these questions. In the answers below, I will try to give you an abbreviated version of the information I have found in his book.
Q – How does one make a budget?
First, look at your bank statement and find out where you money goes. There will be some things that don’t show up in your checkbook because they are on automatic withdrawal, but they will show up on your bank statement. There will also be things that you pay for with cash. It will take a little more effort to keep track of these, but take your best guess at what you spend on those things. You will probably have to adjust your budget more than once a month in the first few months. Once you get a handle on our income and spending, it will get easier each month to make you budget. Account for every dollar so there is no outstanding balance at the end of your budget. In other words, after accounting for every dollar, your balance should be zero at the end of your budget sheet.
Q – How can I keep track of my spending so I don’t ruin my budget?
Try the envelope system. When you get your paycheck, keep enough money in your checking account for the checks you will write or which come out as automatic withdrawals. Then take the rest out in cash. Make envelopes for every area of your spending. For instance, you will need one labeled “food”, one for gas, one for eating out, one for clothing, etc. You will need to determine for yourself, based on your budget, how many envelopes you will need. Then, for instance, when you are going to the grocery store, take your food envelope with you and pay cash for your groceries. Do that with all of your envelopes. If you put your receipts in the envelope, it will help you when you make your next month’s budget. The envelope system also helps you keep track of how much you are spending, and as the cash in your envelope gets low, it will help you cut down on unnecessary spending. If you run out of cash in one envelope, don’t spend any more in that budget item until your envelope is replenished. And don’t borrow from another fund to refill your envelope. Entertainment and eating out might be the exceptions to that rule.
Q – Should I tithe on my gross income (before taxes) or my net income?
In Leviticus 27:30 God’s Word says, “A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the Lord: it is holy to the Lord” NIV. You don’t have to worry about it if you just automatically tithe on the gross. Remember, giving to God is not about keeping the rules, it’s about generosity. This may come as a revelation to you, but did you know that you can actually give more than a tithe? Generous giving is giving above that tithe.
Q – What if I don’t have enough money to give a tithe?
This is a tough one for many people. Their income doesn’t keep up with their outgo. I won’t get into the reasons for that here, but I will give you some advice that has worked for us over the years. Are you ready? Here it is. Give to God first! The very first check you write when you get your paycheck is your giving to God. I would make it a tithe, 10% of your gross income before taxes and insurance and IRA’s and 401K’s and all the other things that are taken out. (I’ll deal with this some more under “Spending”.)
Q – If I give to God first, what if I don’t have enough money left to pay my bills?
That may happen, but there is only once place in the Bible where God tells us to test him and it is found in Malachi 3:10-11, “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this says the Lord Almighty, and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.” NIV. Remember what Jesus said in the sixth chapter of Matthew? If we seek first His kingdom and His righteousness, all of our needs will be met by Him. We just need to be wise stewards with what He gives us. If you are in such financial straits that after your giving to God you can’t pay some of your bills, here are two things you can do to resolve the situation.
First, generate some extra income. Get a second job, have a garage sale, or use Craigslist or Ebay to sell everything you don’t need. Downsize you cell phone coverage, get rid of cable TV, stop eating out, don’t go on vacation don’t buy non-essentials like candy and soda, don’t go to movies. You can find more ways to downsize if you will just look at your spending. Do you really need that Starbuck’s?
Second, start paying off your debts as fast as you can. Use Dave Ramsey’s baby steps in The Total Money Makeover to do this. It will work if you will work at it.
Many of the world’s financial experts will tell you to pay yourself first. They mean you should put at least 10% of your paycheck in savings. But Christians have a higher priority. Give to God first and saving has to wait until you are debt free. Proverbs 22:7 says, “…the borrower becomes the lender’s slave.” NASU With the exception of a small emergency fund, put savings off until you are free from the lenders.