So, how do you build a budget? The simplest way is by the give, save, spend method. In the post, Budget: What is it I asked you to write the words give, save, or spend next to each item on your checking account statement. The purpose of that exercise was so you could see where your money goes. A budget is going to give you freedom that you never knew you had.
The give, save, and spend method is really simple. You just have to divide your budget into three categories: give, save, and spend. This method is the easiest to learn and implement. When you get your paycheck, 10% goes to giving, 5% goes to general savings, and 85% goes to spending. I know many money experts say budget every month, but budgets need to be personalized. Take me, for example, I budget every week.
Give is the first category in your budget. You should try to start with giving away 10% of your gross income. Giving a portion of your money back to Jesus or your favorite charity is very important. Because, as a Christian, it allows Jesus to bless your life. What if you’re not a Christian? Find a charity you like and give to it on a monthly basis. I believe you should start doing this whether you are a Christian. Because the act of you giving some of your money away releases monies hold on your life. You may ask yourself, but Todd, I can’t afford to give that much. That’s fine, just start with what you have. If you can only afford 5%, then give 5% of your income away, then build up to 10%. You’ll be glad you did.
Save is the next category. Every time you get paid, set some money aside into general savings. It’s not possible to predict what will happen in your life. Your finances need to be prepared for emergencies. You do that by saving. Whenever you get paid, you need to save. You should aim for 5% in this category. You may say I can’t afford to save that much. If it is just 1% of your pay, that is fine. You need to build the habit of saving.
Spend is the last category. This is the category you split into all your spending buckets. What are spending buckets in the budget? Your spending buckets in the spend category are basically what you spend money on every week. You could have buckets for clothes, hygiene, fast food, rent, groceries, car payment, fuel, credit cards, and so on. The idea is to have all your needs covered in your budget.
That’s basically how to set up the give, save, spend method of budgeting. You give 10%; you save 5%, and 85% is yours to spend how you please. Let me be honest with you. The first couple of months will be difficult if you’ve never budgeted before. Don’t quit. You can do it. You will be broke for the rest of your life if you don’t manage your money. No more flying by the seat of your pants with your money, like I used to. Check out Balanced Finance by Andy Stanley to learn more about the Give, Save, Live method of budgeting. Come back next week to see how we put all this together and build your budget.
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