Part 1: Evaluate your core values and prioritize your goals
The best budget is the one you can follow. Whatever methodology you decide, certain biblical principles should be followed.
As Jesus and his disciples were on their way, he came to a village where a woman named Martha opened her home to him. She had a sister called Mary, who sat at the Lord’s feet listening to what he said. But Martha was distracted by all the preparations that had to be made. She came to him and asked, “Lord, don’t you care that my sister has left me to do the work by myself? Tell her to help me!” - Luke 10:38-42
Before we touch any specifics about budgeting, remember the purpose of your labor. While prudence and discipline are biblical principles, don’t become distracted as Martha did. For believers, seeking God above all else is crucial. The goal of stewardship is generosity, not getting rich.
Take a few minutes to think about who you would like to serve financially short-term or long-term (Please recognize that you may not be in the best spot to be as effective as you could be). Additionally, think about any financial goals (e.g. Buying a House, Retirement, Student Loan Repayment, Paying for a Wedding) you may have.
With your purpose defined and financial goals in mind, we can now build a proper biblical foundation for our financial life!
Part 2: Allocate your money based on Income, Obligations, and Values
Taking Care of your household (1 Timothy 5:8): If you have dependents or are members of your family that need it, they should be the priority. Even if our money is earmarked to furthering His kingdom, if those closest to us are in need, we must help them first.
Payback your debt (Psalm 37:21): If you were owed money, you would probably want the money sooner than later, correct? Even though your money may be going to a faceless institution, men and women of God should still fulfill their obligations. In most cases, debt isn’t worth the trouble and anxiety and limits what you can spend on anything else.
Saving (Proverbs 21:20): “The wise store up choice food and olive oil, but fools gulp theirs down.” Your financial dreams and goals aren’t promised. However, saving money to withstand storms that will inevitably hit help. The amount you should save depends on your goals, motivations, and necessity.
If you hope to pay down your student debt as soon as possible, saving until you have enough to withstand any given emergency expense ($1000 - $2000) would be ideal. However, if you have a volatile job and have a family, you may want to save a bit more. Most personal financial coaches and planners recommend three to six months of monthly expense should be saved to withstand income gaps.
Supporting your local congregation (1 Corinthians 16:2): Supporting your local congregation is crucial. After all, you are here to help the lost, rejected, and hurt. There is only so much we as individuals can do. Institutions allow funds to be collected and distributed to people you may never be able to reach. To be clear, I’m not asking you to give to any organization blindly, but pray and compare your local church's work to the actions and heart of Jesus.
Part 3: Pray and Rely on God
The scripture is clear that we should be intentional with our money and plan for how we spend it. There will be rough patches during our journey; tough decisions will be made. During adversity, remember that God is in control and guides our steps.
We can make our plans, but the LORD determines our steps. - Proverbs 16:9
Finally, even with all the personal finance education in the world, we must still ask God what the wisest thing to do with His money. It would be foolish not to ask the owner how we should manage his money.
Bouns: Additional Thoughts - Zero Based Budgeting
This article isn’t designed to be the complete guide to how to budget. It is written to serve as a reminder of biblical principles when thinking about finances. Below are a few thoughts about budgeting and where to seek additional help. Finally, if you know someone in your life that is good with money please reach out to them and ask for their input.
I recommend zero-based budgets for anyone serious about becoming debt free and/or achieve financial freedom. Imagine having to stretch $20 for food for an entire week. There would be a level of intentionality, frugalness, and sacrifice to eat for the next seven days -- This is the idea behind zero-based budgeting.
Zero-based budgeting is a method that has you allocate all of your money to expenses, savings, and debt payments. The goal is that your income minus your expenditures equal to zero by the end of the month.
Zero-based budgeting demands quality time and discipline to complete and may be intimidating. However, this budgeting methodology will challenge your financial insecurities and be the most effective method in achieving your long-term financial goals.
More information: Zero Based Budgeting*
- Dave Ramsey is a personal finance expert and founder of the critically acclaimed Financial Peace University.