GOD'S MONEY AND YOU: Where? Oh, Where Did My Money Go?
My name is Loema Titanji and I have been a member of TrinityLife for a little over 5 years. As part of the Trinity family, I’ve had the pleasure of serving on both the choir and the worship team – ministries which have both blessed me greatly. Some of my favorite activities include singing, cooking, baking, reading, working out, spending time with family and friends and road trips with my fiancé. When I’m not doing one of these things, I work full-time for a local biotech company as Controller, running the accounting department. I’m an alumna of University of Baltimore where I earned both an undergraduate Accounting degree and an MBA in Finance. I am also a CPA, licensed in the state of Maryland. I’ve always had an affinity for numbers and logical thinking, so accounting is a great fit for me. I count myself blessed to have a profession that I love!
Where? Oh, Where Did My Money Go?
It’s the end of the month again and you wonder, “Where in the world did all my money go?!” Is this something you wonder about more often than you would like? Are there financial goals that you repeatedly set but constantly fail to meet? If your answer is yes, then I have a question for you: Do you have a personal budget and, more importantly, do you stick to it? Budgeting is one of the fundamental building blocks of successfully managing our personal finances. In this column, I will briefly discuss the basics of creating a personal budget and share a few resources that may be of help to you.
In Luke 14:28-30, Jesus asks “For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish.” This verse contains the essence of budgeting: Taking stock of what you have in hand and what you will need to spend to get to the goals you have set for yourself.
A budget is defined as “an estimate of income and expenditure for a period of time”. However, before creating a budget, you have to know how much money has been coming in and going out every month. This gives you the information needed to create your estimates for upcoming months.
To get started, all you will need is a piece of paper and a simple calculator. If you are comfortable with a computer, then you could use any spreadsheet tool of your choice. I suggest that you start out by doing this for a monthly period.
Take inventory of all income: Are you paid weekly, bi-weekly or monthly? Do you do free-lance work to supplement your regular income? All reliable and regular income sources should be counted. It is important to be realistic here. If something only yields a small amount of income on a sporadic basis, I would not include that in my monthly budget.
Take inventory of all expenses: You may need your last month’s bank statement to help you with this step. Write down all expense items and how much you’ve spent on each one. Do not leave anything out – all expenses represent money going out! It may be shocking to see on paper what you really spent your money on and/or how many unplanned expenditures you had. No fear! Now you know and can start down the path to more disciplined spending.
Add up your income and all your expenses: Did you spend more than you made? If you did, then a course correction is definitely in order. If you didn’t, there could still be room to streamline things and find ways to save more and/or give more.
Create your budget: First, estimate how much income you will get from each source. Second, estimate how much you will spend on each expense item. Be realistic – if you’ve always had to spend $300 a month on groceries to feed your family healthy meals, do not suddenly cut it down to $200 for budgeting purposes. If however, the $300 previously spent on groceries included some unnecessary items, then maybe you can pare down the amount by removing those items.
It is important to create a spending estimate for everything; for example: entertainment (eating out, movies), gifts (baby showers, birthdays and weddings), car maintenance and so on. Most importantly, remember to make an allowance for giving to the Lord, for it is He who gives us the power to get wealth (Deuteronomy 8:18). By making an allowance for these items, you will know clearly what you are able to do and still stay within your budget. If after you make these estimates, you realize that your planned expenses exceed your estimated income, then look to see what expense estimate could be reduced.
At this point, you now have a budget. Next, watch your spending in the upcoming month and make sure it aligns with what you planned. Remember, a budget is no good if you do not stick to it! Below are some resources that may be helpful. We are called to be good stewards of our gifts and talents. We can start on this path by using budgeting to help us be good stewards of the money God has blessed us with.
Resources:
Dave Ramsey’s website offers a free budgeting tool and you can access it here. You have to create a user account but the tool is free. http://www.daveramsey.com/everydollar?snid=tools.everydollar
If you bank with either Bank of America or Wells Fargo, they have free budgeting tools available and I’ve personally found these to be quite helpful. You can set a budget and as you spend, the tool pulls the information right from your back account and tracks your spending for you. If you bank with another institution, do check what budgeting tools are available to you as part of the services your bank provides. Several institutions now provide such services.
