Budget Basics - Taking the pain out of budgeting

For most of us, the idea of doing a budget is about as fun as a root canal.  The reality is that God calls us to steward the resources that He has entrusted us with and having no plan or even an idea of where the money goes each month is hardly being faithful.  I have a few tips to help make this process a little less painful. If you aren't convinced that you need to budget, see Luke 14:28-30.

• One Month at a Time - Do a budget every month and at the beginning of the month.  Your expenses change each month and you will need to adjust some of your categories a few times to dial it in.
• Keep it Simple - List every major category, but there are only a couple that you need to closely monitor once the month has started.  I have basically 4 categories that I track throughout the month; Groceries, Shopping, Gas, and Fun money.  Trying to budget clothing, haircare, toiletries, and dog food  separately is time consuming and you will stop doing the budget in no time.
• Use Cash - Use only cash for the 4 categories that I mentioned above.  This will make it easy to track how much money you have left in each category and when you run out, don't buy anything else.  I take out half at the beginning of the month, and half on the 15th. (The other benefit of cash is it hurts more when you spend it)
• Account for Every Dollar - Don't leave a bunch of money at the bottom of your budget.  Tell it where to go. I put every extra dollar to the baby step that I am on.  If you aren't familiar with Dave Ramsey's baby steps, check it out Here. You can use it how you want but make sure every dollar has a purpose, even if it is just going to sit in a savings account for who knows what.

If you need help prioritizing or don't have enough money to last you through the month, here is a list of categories in order of importance.  The first five are the ones that are essential.

1. Giving
2. Food
3. Shelter (Mortgage/Rent)
4. Utilities (Electricity and Water, not Cable)
5. Transportation (Fuel, Insurance, Repairs)
6. Insurance (Medical, Life, etc.)
7. Saving
8. Other Utilities (Cell Phone, Cable, etc.)
9. Shopping
10.  Loans
11. Credit Cards
12. Fun money

Budgeting is not glamorous, but it is what people who have financial security do every month.  The next step is sticking to the budget, and if you do, your stress levels will decrease and you will begin to be faithful with what God has entrusted to you. That is a pretty good feeling.

If you have any debt (other than a mortgage), check out my blog post "Debt Crisis".

Lastly, if you are married, check out my blog post "We Are On The Same Team!" to help you keep from blowing up your budget and your marriage.

Update - 5/5/2014 - Below are three budgeting tools that will help you in your quest for tracking your money.

• Dave Ramsey's Cash Flow Plan - This is a classic paper version of a budget that you can print every month and go old school pen a paper.
• BudgetSimple - This is a more high tech version of a cash flow plan.  This is my recommendation, because you can get everything in there and plan one month at a time.  You can also print your budget once completed and copy your previous month to the next month to give you a starting point.  It will connect with your accounts to track expenses for a monthly fee, but you can use the budgeting feature for free.
• Mint.com - This is a free version of BudgetSimple, but has some limitations like an inability to print your budget or plan a month ahead.