Household Budgeting

Basic Assumptions from Scripture

1. We are commissioned by God to rule

2. Stewardship of our resources is an act of worship to God

3. Being rich is not evil; it’s mis-managing riches and wealth that is evil.

4. Great things come through careful planning

5. God’s desire is that we multiply our finances, talents, and skills.

6. Good accounting practices lead to prosperity

Steps in household budgeting:

Step 1: Track your monthly income and expenses. If you doing household budgeting, we recommend using computer software for this task. (We really like Quicken Home & Business, but if you’re not running a business, Quicken Deluxe is just fine.)

Step 2: Set up a budget spreadsheet that includes the most realistic amounts for each expense category. (We have always used Excel for that, which is part of Microsoft Office 365.)

Step 3: Set up your “sinking funds”. There’s so much freedom in having money set aside to meet expenses that are variable or occasional, such as clothing and gifts. Think of a “sinking fund” as a money pot with a name on it, such as “auto repair”.

Step 4: Maintain a “Watched Expenses” report for categories that can vary based on how much you spend. This will help you know how much to budget each month in a particular category, or how much to maintain in a particular sinking fund. Examples of watched expenses may include: groceries, eating out, clothes, gifts, and sundries.

Maintaining your Budget using a computer

Assuming you are using computer software similar to what is described above, you only need to do the following steps each week:

1. Download your banking transactions from all your accounts account, including your credit card, then categorize any income and expenses that have not yet been categorized.

2. Copy amounts you see in your watched expenses report to your spreadsheet, as well as all paid fixed expenses. (These should both be listed in the “paid” column of the spread sheet.)

3. On your spreadsheet, list any actual income that is pending, then move it to the paid column after it arrives in your account.

4. Update your checking and savings balances.

5. Adjust your sinking funds as needed until your budget is balanced.

Managing Credit

Credit cards have their pros and cons. They are great for convenience, air miles, and other rewards; however, for those who do not pay their entire balance every month, they can be a nightmare! If you find that you are unable to pay off your entire credit card balance every month, destroy your credit cards and commit to using debit only. If you believe you can manage credit, keep the following tips in mind:

Keep only one credit card that will give you airlines miles and other rewards. (If you travel a lot, having a card like this will save you a lot of money as long as you use it well.)

To maximize your rewards, use the card to pay every possible expense; but only if there is money already in the checking account to pay it in full every month.

Be sure to categorize each transaction for your credit card using software, just as you do for your other accounts.

The secret to paying it in full every month is to keep the balance listed on your monthly

For more details on this topic, visit our article on budgeting

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