A good definition of a budget is, knowing how much money you receive and making plans on how to spend it in the best way. The purpose of making a budget is to determine how to avoid spending more money than we receive. The purpose of a budget is to know how to avoid debts.
A budget is made up of three parts: Income, Expenses, Balance. For example, let’s make a budget for one month. In that one month you can expect to receive an amount of money as your Income. Also, in that month you will have money that you have to pay out for things you need. Those are your Expenses. The Balance is subtracting the expenses you have from the income that you have received. Your budget might look something like this.
| INCOME | EXPENSES | BALANCE |
| Husband’s salary $ 1500.00 | Giving $ 305.00 | Income $ 3050.00 |
| Wife’s salary $ 1500.00 | Food $ 500.00 | Expenses $ 3010.00 |
| Selling crop $ 50.00 | Electricity/water $ 50.00 | |
| Rent $ 300.00 | BALANCE $ 40.00 | |
| Total income $ 3050.00 | Transportation $ 550.00 | |
| School fees $1000.00 | ||
| Savings $ 305.00 | ||
| Total expenses $3010.00 |
STEPS FOR MAKING A BUDGET
A husband should sit down at a table with his wife. Notice: a budget for a family is not to be made by one person. Both the husband and the wife should make the budget together and agree to keep it. They will need a pencil and paper to write on.
- They first need to write down their income. That means a full disclosure of money received. There should not be any secrets.
- Next, they write down their expenses. This requires much thinking and keeping of records. The best way to know your expenses for one month is to buy a small notebook, one for the husband and one for the wife. For 30 days both husband and wife write the date, then the items bought, and the amount paid.
- At the end of 30 days, they would sit down together again and compare their notebooks. If they have kept good records, they will know exactly how much they gave to God, how much they paid for each item of food, etc. By doing this they will see where they have overspent, or where they can cut some of their expenses.
- Now they are ready to make their monthly budget based on what they know about their income and their expenses.
For example: husband might write: 1 June fuel $10.00
Lunch $ 3.00
wife might write: 1 June Bread $ 1.00
1 Kg Sugar $ 2.00
They would continue this process for 30 days.
THINGS THAT WILL SPOIL A BUDGET
- Unexpected expenses: After a couple has carefully made their budget, they could have expenses that they didn’t plan on. Perhaps a child gets sick and needs hospital care or someone has an accident. It is a smart plan when making a budget to have one category of expenses called Savings. Give 10% to God and save 10%. On your expenses column write Savings. In the example above notice $305.00 was included for savings. Savings should only be used in a case of emergency when both husband and wife agree. Savings should be in an account which requires both to sign to extract the money, or in a box with two locks and two keys.
- Inflation: After you write the cost of your expenses and you make your budget based on that amount, you may find that prices increase for certain items. A good way to plan for inflation is to raise the price of the things you need to buy on your budget sheet. By doing that you won’t be surprised by increases.
- Failure to keep good records: Without accurate records you will not be able to know, or to write in your budget, truthful amounts.
- Husband and wife disagree about the budget: A family budget must be agreed on and kept by both a husband and his wife. One person cannot keep the budget alone. When both make the budget and understand it’s purpose, they will receive a blessing together that comes from good stewardship.
- Impulse buying: When the budget items have been agreed on by both the husband and wife, they cannot vary from what they have agreed on. For example, when shopping in the supermarket, buy only what is on your list. It is best to shop after you have eaten so you won’t be tempted to buy other things. You can make one item in your expenses for extra things. For example, you might allot a certain amount of money for the husband to use for whatever he wants. The wife would be given the same amount. That amount is written in the budget as an expense for them to use as they wish.