One major aspect of financial preparation is budgeting.

March 29, 2022

Budgeting basics

In the last month’s article (“Living in the Rainy Day”), we discussed the importance of saving, becoming financially prepared for the unexpected.

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:

  • Monthly Income: Consider monthly income as any amount of money that you receive consistently each month. Only account for funds received after taxes (net pay). You can also include funds received quarterly by calculating the amount to derive at a monthly figure.
  • Tithes and Offerings: Tithes and offerings should be the first category of deductions and listed separately. Writing this on paper visibly demonstrates giving God your first fruit. While separating this item may not seem like a necessary action, spiritually, you will experience a transformational difference. Be amazed just how God blesses you by giving faithfully.   
  • Monthly Expenses: Expenses most likely will be the lengthiest category. Examples include housing, transportation expenses, utilities, food, childcare or school, personal upkeep expenses, etc. First, create subcategories of general expenses. Then list the specific expense under the corresponding subcategory. All monthly expenses should be notated, regardless of the amount. Listing individually will provide prompt recognition of any excess spending.
  • Savings: It is important to set aside funds for savings. Saving could be for an emergency fund, personal, an event or funds for retirement. As discussed in the previous article, consider reducing expenses to have an adequate savings.

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.