What a Good Budget Looks Like

By: Alex Cook

28 “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? 29 For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, 30 saying, ‘This person began to build and wasn’t able to finish.’ – Luke [14:28]-30

What is a Budget?

A budget is simply a tool to help you track the money that is coming into your household (i.e. income) versus the money that is going out (i.e. expenses).   It helps you to get clarity on how you are spending and to know how much is left over at the end of each month. Naturally you need a surplus, if not you’re going backwards, and getting into debt!

Why do a Budget?

A budget is an act of stewardship. Christians are called to be stewards of all God has given us, be it our intelligence, our athletic ability, special talents and of course the money he has blessed us with.

Budgeting works! Budgeting helps you to identify where your money is going, and helps you to determine whether you can achieve your financial goals. The key to successful budgeting is knowing and building your surplus. What you do with that surplus is the key to your financial future.

A budget is a great tool of self-awareness. You can’t become good with money if you don’t know where it is going. An obvious, yet overlooked truth! Secondly, it will help you ensure that you are honouring God with your money.

How do you do a Budget?

  • Make a list of all your income sources (salary, dividends, interest)
  • Make a list of all your expenses – be as detailed as possible.
  • Put Giving to God at the top of your Expenses List – put God first in your life and that starts with your budget
  • Calculate your surplus.

What does a good budget look like?

I am often asked what does a good budget actually look like. Well here are some basic guidelines:

Accommodation Costs – keep your mortgage or rent to no more than 30%. Any more than this and you will struggle to cover other important areas of your budget.

Giving to God – Christians are called to lives of extravagant generosity. I think 10% is a good place to start. It is not the limit, but the starting point. As your income rises you can look at increasing it. I’m amazed how many Christians lament the direction that the world appears to be heading, but then fail to give generously to kingdom organisations to change it!

Save 10% for Long-Term Goals – in my financial planning career the main reason people failed to achieve long-term goals was that they simply not did save for the future. Stop making excuses and start putting money away for long-term goals.

You can download a free budget planner template at wealthwithpurpose.com/resources/my-toolbox/

For more on budgeting you can also download our guide to successful budgeting at wealthwithpurpose.com/resources/free-ebooks/

Don’t delay, start now!

Article supplied with thanks to Wealth with Purpose.

About the Author: Alex is a licensed financial planner and the founder of Wealth with Purpose a Stewardship Ministry that helps Christians handle their money God’s way.