Five Reasons Why You Should Keep a Personal Budget
I’m going to go out on a limb here and assume that if I asked you to make a list of your top 10 favorite things to do, “keep a budget” is not going to be on the list. It may not be in your top 100, either. Of course, brushing your teeth and taking out the garbage don’t exactly qualify as “fun” either, but they simply must be done because if you don’t do them, things get messy.
Budgeting is no different. If you have money, you need to care for it. Better yet, as Dave Ramsey puts it, you need to “make your money behave.”
Even more than making money behave, as believers, we must understand one simple, but profoundly true concept: God owns it all. That means that anything you have belongs to Him. Your role is to steward (or to manage) His stuff wisely, and that includes the money He provides.
I love John Maxwell’s definition of a budget. He says:
“A budget is people telling their money where to go instead of wondering where it went.”
I won’t dive too deeply into the practical aspects of keeping a budget here. Instead, I would like to just give you five simple principles that are available to those who endeavor to faithfully keep a budget.
It will show you the truth about what you spend.
A budget provides accountability. Plain and simple. A budget will show you where you spend your money and how often. When my wife and I first began keeping a budget, we were dumbfounded at how much money we spent simply eating out. There was something about seeing that monthly total that shocked us back to reality and made us reconsider what we value there.
How you spend your money is a major indicator of what your heart treasures. A budget is likely to reveal a few idols in your life. Be prepared to smash them as you prayerfully surrender these areas to Jesus. The truth about your finances may be ugly, but it is better to know where you stand so you will know how you can improve.
It will help you achieve your financial goals.
You’ve probably used Google Maps or some other mapping service to get to a place you’ve never been. It tells you three things:
- Where you’re starting from
- Where your destination is
- How to get there, turn by turn
A budget basically does the same thing. It provides a current financial snapshot of where you are. From there, you just decide where you want to go. Do you want to be out of debt (please say “yes”)? Do you need a new car? Does your house need a few improvements or fixes? A budget is your long-term plan for those things. Once you know where you are going, you can get moving, $200 at a time, or at whatever financial pace you set.
The trick is to faithfully move forward, day by day, week by week, month by month, and year by year. That’s how you reach those financial goals that seem so far away right now. Remember, building wealth does not happen overnight. It’s built through many small, good decisions made over time.
It will make you a more faithful steward.
If you truly see the money you earn as yours, then you will likely want to do what you want with it. You may not want to be encumbered by making a budget or learning how to keep one. But if you see your money for what it is–something that belongs to God that He gives you to manage–then you might begin to give your money the care you give to your company credit card, for example. You keep track of it. You keep a log of where you swiped it and how much the purchase was, etc. The reality is that the money sitting in your bank account belongs to the Lord, and you will be held accountable for how you managed it.
It will help you avoid repeating past mistakes.
Keeping a budget has made me a better steward and a more cautious consumer. After my wife and I worked so hard to become debt-free, we made a few vows about money. One of those vows was to never be in debt again. There is something about working hard for something that makes you appreciate it more and to be careful not to lose it. In this case, we learned to value our financial freedom enough that we’ve vowed never to voluntarily loose it again.
It will bring you together with your spouse.
Dave Ramsey says this a lot, and I have found it to be true. Simply having a plan for our money has given my wife and I an added sense of security because we know exactly where we stand financially. We have a plan, we have goals, and we are on our way, one step at a time. Most importantly, we are doing it together. Even if you are single, let this concept set your vision for what a healthy marriage should look like.