A lot of people think budgets are only for people who have financial issues or people who are experiencing a financial crisis.
But in order to be a good steward of what God has entrusted to you, you need a budget, whether you are: young or old; single or married; have plenty of money or are struggling to make ends meet each month; employed, looking for a job or retired; have no savings or lots of money in savings
A budget (or spending plan) is needed because not matter what your situation is today it could be different tomorrow. Using a budget allows you to know where the money is going now, so when your future changes you know how to adjust financially.
In James chapter 4 we are warned against thinking we can know what our future holds. “Come now, you who say, ‘Today or tomorrow we shall go into such and such a town, spend a year there doing business, and make a profit’—you have no idea what your life will be like tomorrow. You are a puff of smoke that appears briefly and then disappears. Instead you should say, ‘If the Lord wills it, we shall live to do this or that.’”
Here are the reasons to use a budget:
It’s A Roadmap
You would never start a journey to an unfamiliar location without first figuring out how to get there. Using a budget is like a roadmap for your finances – it tells you where the pitfalls are (overspending on certain things or not being generous in your giving). It allows you to plan for future events and adjust as needed when there is a roadblock or detour.
“Which of you wishing to construct a tower does not first sit down and calculate the cost to see if there is enough for its completion?” Luke 14:28
It Gives You Control
When you spend without a plan, you may be put into situations where the lack of money makes decisions for you. For example, your dream job may fall into your lap, but you have to turn it down because a job you hate pays more money and you need the money due to debt payments. So lack of money may prevent you for doing those things that are on your heart. Money should serve our purpose in life, not rule our actions.
“For the love of money is the root of all evils, and some people in their desire for it have strayed from the faith and have pierced themselves with many pains.” 1 Timothy 6:10
It Reduces Arguments
Money plays a big role in most arguments between spouses. By using a budget, you and your spouse can improve your financial situation, together! A budget gives you facts to talk about – you don’t have arguments with statement such as “You always spend too much money.” A budget allows you to have discussions like “We overspent on groceries this month by $100.” If you want to avoid strife, then you and your spouse really need to have facts to talk about when you are discussing finances.
“A person gains honor by avoiding strife, while every fool starts a quarrel.” (Proverbs 20:3)
It Improves Relationships
A budget creates a financial plan that the whole family can work on and contribute to in order to achieve family financial goals. If you are trying to save for a special item for the family, whether it’s vacation or a new TV or anything else, have a family meeting, discuss how much the item is going to cost and what each person in the family can do to help save the required funds.
The children may want to make their lunches at home, instead of buying lunch at school. Or maybe an older child will cut coupons and assist with the grocery shopping. What better way to raise kids who are money conscious than by getting them involved (at an age appropriate level) in the family finances?
Proverbs 22:6 “Train up a child in the way he should go and even when he is old he will not depart from it.”
It Prepares You For Emergencies
Sooner or later, everyone has a financial emergency. A budget should be used to create an emergency fund so you won’t be left wondering what to do when such an instance comes up. Our recommendation for the emergency fund is to first save $1,000, then 3 months income, then 6 months income then 12 months income.
“Do not boast about tomorrow, for you do not know what any day may bring forth.” Proverbs 27:1
It Improves Your Habits
A budget will help you to be more value and price conscious when shopping. It will also help you pay more attention to how you consume resources around the house, such as water, electricity, and gas. It helps stop impulse buys, and helps you be a better consumer–which is always a part of being a good steward.
“Precious treasure remains in the house of the wise, but the fool consumes it.” Proverbs 21:20
It Helps You Payoff Debt
With credit cards being common forms of payment, it is easy to fall into debt, and quickly! A budget can help you get out of debt. Plus, once you get out, you can continue using the budget to stay out of debt. Paying interest on debt is throwing money away. The average household in the US has about $15,000 in consumer debt. If you have anywhere near the average, you are spending $100 in interest payments each month. If you did not have to pay interest, what else could you do with the $1,200 you are wasting each year? If you have debt you are a slave to the lender, and if you don’t think you are a slave, just try missing a few monthly payments, and see what happens.
Proverbs 22:7 “The rich rule over the poor and the borrower is slave of the lender.”
It Helps You Save Money
A budget is the perfect tool to help you save for a goal, such as college, a home, a car or retirement. Having a line item in your budget for savings will help you stay focused and attain your goal. The sooner you start saving, the easier it will be to have enough saved to fund your retirement.
“Four things are among the smallest on the earth, and yet are exceedingly wise: Ants—a species not strong, yet they store up their food in the summer” Proverbs 30:24-25
It Improves Your Wellness and Reduces Stress
Wellness is not just about your physical health; it also includes your mental health and part of your mental health can be financial concerns. Incorporating a budget into your everyday life can improve your financial health just as a diet can improve your physical health. For many people, personal finances are a stressful issue. Using a budget will give you the peace of mind so you aren’t left lying awake at night worrying about your financial situation.
“Can any of you by worrying add a moment to your lifespan?” Luke 12:25
It Allows You to Analyze Your Generosity
So many times the money just trickles through our fingers and it seems impossible to be generous. There are so many worthy causes asking for our financial support. There are charitable organizations for almost any cause under the heavens and there is also the responsibility to support our parish financially.
If you are not managing your money, it is hard to find the money to give when the time comes—whether that’s every week at Mass or special opportunities that come up during the year.
“Keep in mind the words of the Lord Jesus who himself said, ‘It is more blessed to give than to receive.’” Acts 20:35
Everything you have is a gift from God, and someday you will have to account for how well you managed all the blessings God gave you, including your money and possessions.
Using a budget helps you to be accountable to the Lord who gave you everything. It helps you make wise decisions based on what the Lord would have you do, not based on what you are hearing on commercials, or from the people around you.