I love budgeting!
Definitely haven’t always been this way. In fact, when I think about all the money I’ve wasted over the course of life, I get a bit upset at myself, but I’m learning to let go of those mistakes and I’m thankful that my mentality changed before I was married with kids.
The mental shift first began when I had a convo with one of my best friends. We were talking about our financial situations and future marriages and she said something that totally changed my perspective on money.
She said “I don’t want to come into marriage saying ‘my credit is bad, I have $10,000 in credit card debt, plus a car note and student loans, but I’m cute! Here you go husband! This is all I have to offer.’”
At that time, I’d never thought about my current financial decisions affecting my future marriage finances. It was my first eye opener.
The second eye opener happened when I asked the Lord to help me steward different areas of my life. He told me to find out His view on money. So I researched different biblical financial books and ended up reading one called “Managing God’s Money,” by Randy Alcorn.
The biggest takeaway from this book?
My money is not “my” money at all.
I am a steward of what belongs to God. And so began the next major mental shift as it relates to my finances. I began to pray and ask God what to do with my money. I began paying attention to my areas of weakness and waste.
Through these times of observation, research, prayer and reflection, I developed a system that has been absolutely life changing. So! Since today is payday and I just went through my bi-monthly payday routine, and I thought I’d blog about my budget process!
My method is definitely different, but it works for me. Everyone must find his or her own method for managing finances, but here’s how I do it:
I have 5 bank accounts (don’t judge me Lol) and 1 credit card.
My 5 Bank Accounts are broken down as follows:
1. Bills – all my monthly recurring bill money, car note, rent, Spotify, car insurance, etc. goes here
2. Give – this is a giving account where I give 5-10% of all my income away (this is separate from tithes) – this is money used for missions, birthday gifts, helping random people/causes
3. Travel – this is a fund used for saving for trips
4. Personal Checking – This is my “play” money that I really don’t play with much at all Lol – it’s mainly used as cushion money. iTunes and book purchases and if ever needed, clothes are purchased from here. It’s also the account I deposit everything into and then divide it to all the other accounts from.
5. Savings – this is my savings that I only touch if I absolutely need to like for new tires or something important. It rarely gets touched…like ever.
My 1 credit card – it is used for gas because I get cash back for gas. So it’s like I’m getting a free tank of gas every few months. I only use the credit card outside of gas if I need to pay for something that I know I’m getting reimbursed for like random medical expenses or something to that effect. The goal is to keep it at a balance that I can afford to pay off every month.
I did at one time abuse my credit card use and started buying flights and hotels that I couldn’t afford so I cut up my credit card and went months without one until I disciplined myself to stay on track.
To this day, I still threaten myself to cut it up, whenever I’m tempted to make a splurge that I know I won’t be able to pay back the next month.
That’s the gist of where everything flows to. Let’s check out the process.
The Budgeting Process
Every two weeks I get paid and I use Evernote to do a bi-monthly Spending Plan.
Note: These are example numbers, not my real income/expenses…except I did use my REAL Car Note balance…jussst in case someone gets inspired to pay that off. Lol
Here are the steps I uses to manage God’s finances.
STEP ONE: DEBT
The first thing I do is calculate my debt.
How much do I owe on my car and how much do I owe on my credit card? Then I total these things out. I think it’s good to keep in mind how much debt you have hanging out there. It’s good to look at it regularly rather than push it off and ignore it.
The longer you’re in debt, the longer you’re a slave to someone else and the more you ignore it, the bigger it will grow.
Here’s how that section looks:
STEP TWO: EXPENSES
So I have set budgets for my monthly expenses as well as my food, gas, toiletries, and weekend/entertainment. Those budgets look like this:
STEP 3: SPENDING PLAN
From here, I operate with a “zero” budget. Meaning every pay period, I designate where every single penny is going. That looks like this:
STEP 4: GET CASH
For my “Set Budgets” I get cash out and use an envelope system for everything except for gas.
That means I get cash and then put it in a specific envelope that I keep in my wallet and spend from that in these categories:
“Food” – breakfast/lunch/dinner money for Mon-Fri
“Entertainment” – weekend money for food & play
“Toiletries” – soap, hair products, toothpaste, etc.
“Groceries” – umm…groceries
The cool thing about this is that if I have money left over from one pay period, it rolls over into the next two-week period, allowing me to save!
For example this week I had $20 that I didn’t spend from my “food” budget so when I get cash, I only need to take out $60 instead of $80, giving me $20 of cushion/play money that I get to leave in my personal checking!
Now, as a means of keeping myself motivated to continually be a good steward of God’s money, I’ve also created a reward system for myself.
On Pinterest I’ve created a “Future Life Purchases” board, where I save things that I will eventually reward myself with once I reach specific goals.
Like the iPhone 5s: I made a goal to save $1,000 in my savings account, plus save the price of the phone in my personal checking, then I could reward myself by purchasing the phone!
I have items ranging from books to a bike to a dog (Shhh! Don’t tell my roommate) on this board.
So that’s the gist of my finance routine.
I’ll end it with this.
Know that we are merely stewards of God’s money. Everything we have is His. Ask Him what to do with all the money you get and see what a difference He makes in your financial world!
God is the wisest and He knows what we need! So trust Him in everything!
Talk to Me!
How do you budget your money? Do you think I’m crazy for having 5 bank accounts? What tips would you add?