Most people don’t like to talk about money, which is funny because it is something we use daily. The decisions we make around it can and will affect our future.
Handling your money issues head on is the beginning of building a healthy relationship with your finances. I used to cringe every time I had to deal with and talk about money. I would rather bury my head in the sand and wait for whatever money issue I had to pass. It was so bad that I avoided things like looking at my bank statements, credit letters or anything related to my finances. Until a situation creeped up on me and forced me to face my money game like a big girl. Even though I was earning good money, I didn’t keep much of it and I didn’t even know where most of it was going.
Even though I was earning good money, I didn’t keep much of it and I didn’t even know where most of it was going.
Luke 14:28-30 offers us a practical piece of advice that can be applied to planning our finances: “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.” Just think about it: before building a tower or taking on any major project, wouldn’t you sit down, consider the costs, and make sure you’ve got what it takes to see it through? After all, nobody wants to be the one who starts strong but can’t finish, leaving everyone scratching their heads. It’s a common-sense reminder with a Biblical foundation that planning is a crucial part of success, which has important implications when considering our finances.
Planning is a crucial part of success
There is so much we can talk about when it comes to finances but let’s chat about goals and the best place to start is with simple budgeting. Budgeting can help you control your money by controlling your expenses and eliminating wasteful spending. Since budgeting requires you to plan your finances ahead of time, you can save money without worrying if you will have enough left over for your living expenses.
I know that budgeting can be hard and requires discipline that most of us don’t possess, so let’s have a look at a simple budgeting plan that can be easy to adopt.
The 50/30/20 rule
It is called the 50/30/20 budgeting rule. In this rule of thumb, you allow up to 50% of your income for Needs (tithe, groceries, rent, utilities, etc). Then 30% allocated for Wants (shopping, spa’s, etc). Then you commit 20% to your Financial Goals (savings , investments & debt repayment).
If your needs go over the 50% mark, you may need to dip into the “wants” portion of your budget for a while, until you are able to adjust your expenses again. You need to prioritize your wants.
I like the simplicity of this plan. Over the long term, following these guidelines will help you manage debt, have room to indulge occasionally, and save to pay unexpected expenses.
Overall the 50/30/20 rule can be a sound budgeting method for some people. However whether the system is right for you depends on your specific circumstances. Regardless of the system you use, budgeting, making smart plans, and honouring God with our resources will find us on a path of financial peace and security.