Times are tough. Our economy is still recovering from the recession that followed the 2008 financial crisis. Unemployment, poverty, and homelessness are problems for our country. Many families live paycheck to paycheck and need assistance with groceries, utilities, and health insurance. Finding a job is more difficult and competitive than ever before.
It’s essential in these tough times to know how to manage your family’s money well. I sit down at my desk a couple of times a week to “do the budget.” This is when I balance the checkbook, pay the bills, and make sure my family’s money is going where it needs to. Money is too important to handle haphazardly or not at all. And my job as a provider is not just to make money but to manage it wisely.
Living within a budget is the key to managing your family’s money well. A budget is simply a plan for your money. So in this post I want to share with you six principles I adhere to when managing my family’s money. You can click here to view the budget I use and even download it for yourself. Or if you already have one, compare it to mine and see how much you adhere to these principles.
Before we start, I want to challenge men to “do the budget” for their family. In many marriages the wife handles the finances. And while she does a great job, it is stressful for her. This is a burden men should not make their wives carry. Many men say their wives are better with money than they are. That’s fine – ask her to teach you and take over when you are ready. This is an important part of your headship that should not be delegated.
With that being said, here are six principles you can follow to manage your family’s money well:
- Don’t spend more than you make. This is the goal of a budget. Divide your expenses into categories (bills, food, transportation, etc.) and allot a portion of your monthly income for each category. If your total expenses are more than your income, decide where you can allot less money. You have to be willing to discern luxuries from necessities and set limits.
- Keep track of what you spend. Keep receipts and enter expenses into your budget throughout the month. This will remind you how much money you have left to spend in each category. It will also help you set a more realistic budget by showing you if you allotted too much or not enough in any categories.
- Put money away in savings. It is unwise to spend all of your money. Set aside a portion of your income in a separate account for future expenses. These expenses can be planned (car, college, wedding, etc.) or unplanned (lose a job, repair a car, replace an appliance, etc.). Also, prepare for your future. Invest in a retirement account so you will have money when you can no longer work.
- Give to your church or charity. God expects us to give cheerfully and generously to support the advancement of the gospel. If you are a Christian, give a portion of your income to the church each month. If you don’t attend church, support a charity. You will be a more giving and satisfied person.
- Stay out of and get rid of debt. Debt is slavery. Whether it’s a credit card or some type of loan, you are in bondage until you pay off a debt. Do whatever you can to avoid it. Be willing to save up ahead of time or go without what you don’t absolutely need. If you are in debt, pay it back as quickly as possible. Don’t let interest accumulate and multiply the amount you owe.
- 10/10/80. Allot 10% of your monthly income for giving, 10% for saving, and 80% for spending. With this principle, it’s important to start where you are. Maybe you can’t give or save 10%. How much can you do? Start with 5/5/90. Start with 1/1/98 if you have to. And then add to your giving and saving as you increase your income or decrease your expenses.
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