One: Determine Your Goals
First, list what you want for your family. This is NOT a listing of bills that have to be paid. You must set goals — know what you want, what is important to you, before you can work out the details of a budget.
Be realistic. Goals will change as the size, age, and income of your family change. Decide what is most important, giving priority to goals that will benefit the whole family.
Write down your goals in order of priority. What is the most important? (If your children are young, saving for their education is a long-range goal that will not be achieved for 15 or 20 years).
- Long-Range Goals:
- Goals for the Next 5 Years:
- Goals for This Year:
Two: Estimate Your Income
Before you can plan wisely, you need to know how much money will be available for the year and by the month. List all regular monies your family expects to receive during the year: salaries, dividends, rents, gifts, bonuses, allowances, and other sources. If you plan to borrow money, list this under income.
Three: Plan your giving, saving and spending
When you look at the family’s finances, are you getting anywhere? Where is your manner of living and spending leading you? Your whole family can be happier, and find much satisfaction, security, and joy when you wisely plan the stewardship of your finances.
Any attempt at money management without good family communication is a waste of time. A large percentage of divorces in America have money management as the root cause of the separation. The family must be able to talk together very objectively about financial decisions. The family must decide together what is important.
If this is your first try at money management, set up a 3-month or 6-month plan. After you see how your plan works, you can revise it to cover a longer period. If your earnings are very low, you will need to plan more carefully to take care of your immediate needs and current bills. If your earnings are irregular, base your estimate on your previous income and your current prospects. Never purchase over $50.00 without talking it over first.
Four: Remember The Budget Is There To Serve You
A budget is not designed to take away your liberties in spending, but to help you use your dollars more efficiently. A budget is a tool to help your family achieve your goal in a given time. It can help bring happiness and satisfaction to your family. It can be used to honor God who has entrusted life and all other resources to your care.