One major aspect of financial preparation is budgeting.
One major aspect of financial preparation is budgeting. Yes, the word can spark an initial negative reaction. However, this article will provide a positive perspective on how budgeting is not only impactful but also inspirational.
A budget can be defined as an itemized estimate of expected income and expenses for a given period. It’s also described as an amount of money available for spending that is based on a plan for how it will be spent. The purpose is to provide you with a visualized balanced blueprint of how to care for life’s expenses with income that is received on a monthly or annual basis. By detailing items, you can gain a better understanding of your financial picture and how to manage it. A simple and effective budget can be created with three steps.
Set a financial goal: Determining your purpose for establishing a budget and how it can benefit you, will support the decisions made for future financial endeavors. This includes paying off debt, buying a house or car, saving for retirement or the overall improvement of managing funds.
Create separate categories for the following:
Calculate and Evaluate: After recording all income, expenses and savings, calculate each category. Thereafter, subtract total expenses from total income. The final number may surprise you, whether good or bad. Nevertheless, this is your opportunity to evaluate and make any necessary adjustments.
Proverbs 21:5 (RSV) states, the plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want. Be diligent and take the significant step towards establishing financial stability for the present and future. Creating a budget is life-changing. Try it and see!
Jermaine Jackson is the Lake Union Conference Stewardship director.