How can we use our finances in a way that helps us save and spend more wisely? Personal finances are personal, and your budget has to work for you. Here are a few budgeting steps that have served me well. Remember to pray and ask God to help you as you plan!
1. Review Bank Statements
When I’m making a new budget, reviewing bank statements for the last three months gives me a great way of understanding my spending. I go through and add up expenditures per month like gas, food, Starbucks, and prescriptions. When I do this, I find it helpful to look at realistic spending patterns—seeing where we can tighten the belt or maybe loosen it. You might be surprised how much goes to one thing versus another! This first step isn’t to discourage you; it is to help you understand and break down how to go about budgeting.
2. Making Your Budget
Next I set some goals! I make a document and list items in the area of importance: major bills first, then smaller bills. Then I add in some categories for long-term and short-term savings, like saving for a trip or a car or eating out. It can be very small each week, a few dollars to twenty or higher depending on the item. You can start small and build up, putting a few dollars away each week for something big that you need to purchase in the future. Give each category an amount and stick to it each time you get paid.
Another tool I find useful in this planning process is the use of multiple savings accounts, which I can deposit money directly into each pay period. I label them to make it easy for myself. With direct deposit, it’s out of sight and out of mind.
3. Spending
After this, I have to watch my spending, be mindful to stick to my budget, and keep it realistic. For example, if I have been putting money into a car repair account for weeks, and then my car needs a new tire, I can go into that account and see how much I have saved towards these repairs for the past few weeks. Then I use that money to get my tire. If there isn’t enough, I can dip into my short term savings. It does take a few months to get that money saved, but it will build before your eyes. I try to keep this simple and not overthink it. It’s about saving towards things and then having the money there to help you pay for it.
4. Tracking
I find it very helpful to sit down once a week and track my spending to see where I can adjust. I keep an app on my phone so I can transfer money as needed for purchases, and then I reconcile my tracking sheet each week (you could also do this biweekly or monthly). When you get paid, you can use that time to keep things moving and checking in on yourself. If you start a practice like this, it will help you to not be surprised.
When addressing finances, praying and asking God for wisdom is our number one priority in making a budget a reality. God has called us to steward the finances he has given us, so we want to trust him, thank him often, and ask him for help in the process!
