7 Simple Steps to Budgeting Your Way to Financial Ease!
One of the most important steps to getting rich is DISCIPLINE. There’s also hardwork, focus, perseverance, and planning/strategy, but today let’s focus on one of the most important of them, which is being disciplined in your finances. Opportunities and challenges happen to everyone, it’s sustained habits that make you rich, and financial discipline is easily one of the most important of them.
A man without self-control is like a city broken into and left without walls Prov 25:28.
A word for business men: without discipline in your finances, finding capital to run your business would always be futile. Successful businessmen always say their savings were a major part of how they raised capital for their businesses. Them might add other funding sources, but nobody in their right senses is going to fund you when they know you have challenges with handling money.
If you want to move far in business and in your personal life, spending only within a budget you have created is not an option. It is a must.
Here are 7 very simple, practical steps on how to create, and stick to, a life-changing budget.
1. How much do you make?
The first rule of financial discipline is simple: Never spend more money than you make! Money that you didn’t make on your job or business (profit) is simply not yours to spend. Spending this type of money is very dangerous, especially for businessmen. It can destroy you financially.
So, the first step to financial success through budgeting is determining how much you have been making monthly, as a businessman or a worker.
For businessmen, the danger of giving up on budgeting at this point might be high, because you might not even be sure what you have been making per month, because of a lack of a proper accounting system. We would talk about setting this up on another day. For the time being, just try to make a reasonably good estimate.
Do note that, when you run your business as if it is just a way to get cash to take care of yourself and your family, you would probably keep trying to get cash – and wondering why your business has not been growing. You need to run your business like someone who has needs of its own that need to be found out and met. Also, get your PROFIT. This is the only money you are allowed to plan with.
2. Take Out Your Tithe
The Bible commands us to tithe. This is a principle that has worked for me personally. Take out your tithe from your profit. All I can say about this is that, if you want freedom from issues you might not like, then pay your tithe. (If you want to see proof for tithing, you can check Mal 3:8-12).
3. How Much Do You HAVE TO Save?
The first thing after determining or estimating your monthly income is determining how much you absolutely have to save monthly: to pay for your rent, to finance your business growth, to further your schooling, or even for that car or house you have been planning for. It’s almost shocking to note, but the only money that usually makes it into your future is the one you save. Determine how much you NEED to save MONTHLY, and write the amount down.
At the risk of digressing a bit, let me say here that the reason a lot of Christians keep having financial challenges is that they keep planning based on their faith, and not on facts. You speak ONLY with faith, pray with faith and believe with faith; but you have to plan based on facts and not faith. Your faith would certainly come to pass if you hold on to it; but knowing the exact time it would come to pass is another matter entirely. Even Jesus spoke to a tree, and nothing happened till the next day (Mark 11:12-14, 19-24). Your next day is certainly coming, but faith is a process based on principles, not magic. It might not happen right away.
You can use this as a guide: Speak only what you want, not what you see; plan with only what you see, not what you want.
4. Write Down Your Daily, Weekly and Monthly Expenses and How Much They Take
This is the main part of the budget process. Make sure you include everything you usually do, such as phone bills/cards, food, transport, house supplies, church/religious offerings/payments, fuel, internet, etc.
For the daily and weekly expenses, after finising with everything, go back and multiply them to get their monthly totals.
5. Cut Costs
If you have never done a budget before, at this point, your eyes might be almost popping out, 🙂 Questions like Do I spend this much on calls?! might start coming up after you have gotten your monthly totals.
This is the point to start figuring out how to modify your spending habits to be more in line with your income and your long term plans.
The pressure from the society is always to spend, spend, spend. You need to look good, you need to keep up appearances, you need to do this and that for people to respect you, etc; but the what you really need to do is to build up you financial/business life through a process of logical planning and action. This is how every rich man does it, and is the major reason for their success.
Your budget is a major tool to reach this land of financial success.
The next step therefor is to DECIDE on exactly how HOW to modify your spending to get in line with your income/goals, how much you should end up spending on each expenditure category on a monthly basis, and WRITE down all of your decisions.
If you are married, you would have to show your spouse your work, and prepare for a frank discussion, complaints, modifications, etc.
7. Stick To It!
This is perhaps the most important of all the steps. It is absolutely essential to keep to the decisions you have made on these sheets.
To do this, you would need to have a system for tracking your expenses. This could be taking the total cash you have budgeted, and withdrawing only that amount from your bank account for the week, or if you are married, deciding that your partner would help you be faithful to your new budget. It could also be you deciding to write down all your expenses during the day, everyday. This could be more a bit more tedious though, but if it works fine for you, okay. The basic thing is to have a system that would force you to keep to your budget. Without this, it probably would not work.
In conclusion, one MASTER tip for living within your plans and budgets. STOP impulse buying/actions, EVEN IF IT IS IMPORTANT. Once acting based on a plan becomes a habit, you would become rich. The quickest way to developing this habit is only do it if you planned it. Only do things you planned. If it’s just come up, WRITE IT DOWN with a time to do it, even if it is in 30 minutes time, and keep to your promise. Keep doing this, and impulse actions would die out in your life: planning would be enthroned!
The Bible enjoins us to be hearers and not doers, because the blessings are actually in the continual doing, not just in the hearing 🙂
Remember, being rich is not a mystery. Rather, know that you would become rich with good financial planning/discipline. Do it NOW!
… And …
Finally, for your finances to be in top shape, the most important step is to have the wise master planner and provider on your side. Click this link now to invite Him to help grow your finances to the level you have always wanted it to be!
Cheers to you beautiful financial future!