The Value of a Budget
What is a budget?
A budget is the process of tracking your income and planning for how it is spent to pay for bills, save for emergencies, and invest in the future. It is important to know where your income is coming from and when it is available for use. For example someone working multiple jobs on different pay schedules may find it more difficult to track income than someone with one job. In both cases, each person has bills that must be paid on their due dates.
Building a budget will help track the timing of income as you get paid so you can plan in advanced what bills can be paid with the available funds in your account at that time. Knowing when your bills are due is important so that you don’t fall behind or get caught in the cycle of making partial payments month after month. It is critical to pay the entire amount due on your bill when it is due. This builds trust and improves your business relationship over time.
Building a budget also gives a clear picture of how your income is spent and the frequency. Answer the following questions: How often do I eat out? How often do I make small purchases under $50? Am I overspending when I go grocery shopping? Many small purchases can be overlooked and with time add up to big dollars. A budget will help you set a spending limit for small purchases and provide structure for monthly household expenses. Over a short time this will eliminate unnecessary spending and increase your ability to save money.
Building a budget can also help you set and achieve saving goals. One starter goal is to save $1,000 for emergencies. After all bills are paid start setting aside money in a savings account or secret place in your home. There are also technology tools that can help you “keep the change” and increase savings as well. A completed budget will tell you how much money you can save and how fast you will reach your goal.
Written by:
DR. GNP
ADVISE | TEACH | GOVERN
jennoa.graham@gmail.com | www.drgnp.com
For more information about budgeting and organizing your finances, contact Dr. GNP today!
Share your budgeting strategies or struggles in the comments below. We’d love to hear from you.
Do you have any programs that you recommend on budgeting. Also is giving to others do we set a limit for that as well in our budget for the month? In addition for the emergency fund should that be set to save $1,000 a month or is that for the yea? Can you also provide an example of what a budget looks like to guide me as well? I believe I tend to give a lot more than I should versus saving, in addition I also spend more at the store on grocery and household items as well. I also spend on materials i may need to study for my test, tutoring i need towards my test prep for my counseling etc.
Thank you
There are many technology based programs that use banking information and spending habits to build a budget for you. I recommend using a spreadsheet based template to list your bills, expenses, and due dates. There is nothing like putting pencil to paper and creating your budget by hand. For emergency funds, you determine the urgency and how soon it needs to be set up. If it takes a month fine, if it takes a year or two, that is ok. The purpose is to create a goal and work until you achieve it! Microsoft Excel has many templates to choose from to create a budget. Just open a new file and type “budget” in the search field. You must set limits on all expenses. Take care of your own household and your goals first. It is not mandatory that you help others financially. If you need one-on-one assistance with creating a budget please contact Dr. GNP.
Thank you so much Dr. GNP for the words of wisdom and guidance. I receive it and i will began to place the limits on myself and focus on my household. Amen this is an area i need and will become more diligent and consistent in Jesus name.
Thank you this is my area of diligent working, I am working on my discipline finances. This was a great article!
To God be the glory. Keep pressing!
This was a very helpful article! My budget tends to get lost in small purchases, however, setting limits will keep that from happening. I am currently working towards the starter goal for emergencies so I will need to be more cautious of where the money is going. Thank you for the information!
Yes you have the right attitude! Take it one purchase at a time and stick to those limits. You got this!
Thank you all for your comments. Please be sure to share this with others. We want to strongly encourage others to make wise financial decisions not only for now but for generations to come according to God’s word. Be sure to reach out to Dr. GNP if you have any further questions or you can post them here. She’ll be back with more financial tips and counsel! Stay connected. Stay engaged. Stay Titus II Living!
Thank you for this post. Is it good to leave off bonuses? How sh u of they be addressed in the budget if they fluctuate and can do so drastically?
That is a great question. Yes, you should add bonuses to your budget. All income regardless of the source should be included in the budget in the month it is expected. Bonuses are a great way to increase savings, add to investments, or cover annual expenses such as car maintenance. Just like with income tax refunds, you must have a plan in place or you run the risk of wasting it. If you need one-on-one assistance with budgeting bonuses, please contact Dr. GNP.