A Complete Guide on How to Budget for Christian Millennials.

Estimated reading time: 10 minutes

Budgeting is one of those topics that most people don’t enjoy talking about. But truth be told budgeting is essential in your personal finance journey. You cannot manage your finances well when you don’t learn how to budget. You cannot even grow your wealth and experience financial freedom if you don’t aim at budgeting. So, what is budgeting? Well, today I want to give you a Complete Guide on How to budget for Christian Millennials like yourself.

So, what is a budget?
The Importance of having a budget.
Myths surrounding budgeting.
How to budget effectively.
Conclusion

So, what is a budget?

It is an estimate of revenue and expenses evaluated over a period of time. A budget is a snapshot of your financial position. It shows you what is coming in and what is going out. A budget is always adjusted periodically.

The Importance of having a budget.

A budget helps to keep you focused. When you have a budget you easily keep track of your financial goals. And in doing so, it gets easier for you to achieve your goal. After all, how can you achieve your goal when you lack focus? And how can you remain focused when you lack clarity on your financial position. When you don’t have a budget, you easily spend on frivolous things and this keeps you stuck in a stagnant state where you rarely move forward. Without a budget, you cannot save up for large purchases like a car or a house.

A budget helps you live within your means. If you always wanted to learn to live within your means or even better below your means then having a budget will help you do that. As we earlier said, a budget gives you a snapshot view of your expenses and income. And being aware of your financial position gives you the ability to know whether you are living within your means. When your income > expenses, then it means that you are living within your means as there is a surplus.

A budget helps address bad spending habits. A budget will help you see your expenses in their entirety. And in doing so you will know whether what you are spending your money on is worth it or not. Because you are aware and keeping track of your expenses, you find you ask yourself tough questions, e.g. whether the expense is worth it. And in doing so, not only can you cut back on unnecessary expenses, but you also learn to curb overspending and bad spending habits as well.

Having a budget will help you find opportunities for investment and saving. When you have a budget you are able to track how money is going in and out, therefore, cutting back on unnecessary expenses. In doing so, You will find yourself with a surplus which will then open you up to other greater opportunities. Not only will you want to grow your savings, but you will also desire to find ways to multiply your finances through investments.

Myths surrounding budgeting.

I hate math and budgeting is difficult. First, budgeting is simply subtracting your expenses from your income and keeping a track of the same. And the best part is, there are apps that can help with that too. Apps like Nerdwallet, Mint, and Goodbudget are just a few of the apps you can use to budget. A simple excel sheet can also help with that. Let’s face it we have all taken some computer course at one point in life, so that’s not an excuse. Budgeting is the most basic math. It is simply adding up all your expenses and your income then subtracting the Total expenses from your Total income.

I make plenty of money so I don’t need a budget. The reality is that we all need a budget as it helps us know where our money is going. Also, it helps keep us on track and in line with our financial goals. Regardless of how much money you make, you need to have a budget to help you track your expenses and your income. Who knows, in the process, you might realize that you have the funds to start that business you always wanted to, or make the large purchases you thought you couldn’t afford.

A budget is too restrictive. You can include eating out and all these other activities you like to do in your budget. The thing is, you need to plan for everything, including the fun you need to have (Hello the 50/30/20 rule). You can experiment with the budget until you find what works best for you. Remember, the goal is to make wise decisions with your money and not to restrict yourself so much that when you get a chance you overdo it.

I don’t have time to budget. People make time for the things they care about. And if financial freedom is something you want to experience in your lifetime, you will make time for it. What’s the point of living in an endless cycle of debt simply because you won’t make time to budget? Or why would you limit yourself from not starting that world-changing idea because you wouldn’t budget and find opportunities to save up capital for the same? (No judgment here, I am just trying to help you)

Budgets take too much time. Initially, it will take time for sure. But once you have set up the canvas, it will pretty much be plug-and-play. Again, don’t allow this to be an excuse because not only can you find templates to help you with that, but there are apps too that can help you with that. Yes, it can be intimidating at first, but no good thing comes easy. And remember budgeting is the first step to your financial freedom. And even periodic adjustments won’t take much of your time. Do the hard work now and make it easy for you in the future.

How to budget effectively.

Calculate your income

And in doing this, ensure that you calculate the net income which is your take-home amount. Using your gross income will lead to overspending as you will work with the money you don’t really have. What you take home is what you should add up as your income. If you are paid bi-monthly, then multiply your net income by 2 to get your monthly income. And if you are not employed, then use your take-home profit as your net income. If you are employed and also have a side hustle include income from both. The goal is to add up your total income.

List down all your expenses.

To do so, categorize your expenses into fixed and variable expenses. Fixed expenses are the expenses that you pay monthly and cannot do without. They include:

Mortgage/rent
Car payments
Car insurance
Health insurance
Utility bills
Internet, TV, and cell phone service
Tithe* (For Christians specifically. read Malachi 3 for more information)

Variable expenses differ from month to month depending on your lifestyle. They are mostly wants (you can do without) as you can adjust them to allocate your income to other more pressing needs should a need arise. Your variable expenses include:

Travel
Dining
Gifts
Entertainment
Monthly subscriptions for things like a gym membership, music streaming, amazon prime, etc.

These can vary, so don’t be afraid to include other variable expenses as you see fit. Remember, it is your money after all and you should have the freedom to do whatever you want.

Also, ensure that your budget keeps track of your expense due dates so that you don’t fall behind on your payment and get penalized for it.

Check out this tool to help you with your monthly budgeting

Add up the income and expense column

Add up these two columns, then subtract your total expenses from your total income. That tells you your financial position. Having a surplus is always the goal as that means you are living within your means. If you have a deficit, then it is time for you to make some adjustments. Remember, you should at least be able to save 10% of your monthly income. And this then brings us to the next point.

Adjust accordingly.

The rule of thumb is to ensure that you spend 50% of your income on needs and not exceed that, 30% on wants and 20% on savings.

If you are not doing that, start by evaluating your wants. What can you cut back on? Could it be that you need only one streaming service instead of two? What’s the point of having a gym membership if you don’t go to the gym? Is there a way you can supplement that? Maybe buy at-home gym equipment? Or maybe commit to walking around your estate daily? Depending on your motivation level, find what works for you and stick to it. After all, health is wealth.

If, after cutting back on wants, you still find that there is a deficit, analyze your needs. Could it be time for you to downsize? Maybe get a cheaper apartment or maybe renegotiate your mortgage? You can find a financial advisor who can help you with that. The cool thing is that we live at a time when help is available to the touch of a button. So if you don’t know what to do or how to go about it, then find a financial advisor to help you with that.

Review your budget periodically.

A budget is not set in stone, you can adjust it periodically to reflect your current financial position. Things change and sometimes your variable expenses could end up moving to the fixed expense category. Or you could have an added fixed expense, like maybe instead of rent payment, you now have mortgage payment. Either way, you should adjust your budget to fit your lifestyle. This will ensure that you can easily stick to it.

Also, remember to include an emergency fund and a retirement plan in your budget. They are very vital as in reality, unexpected expenses spring up. And when this happens, and you had not made provisions for it, you will end up racking up more debt and, in turn, living above your means. Again, having a retirement plan is essential, as that is something that will happen to all of us. We will all get old whether or not we want to believe it. So make provisions for it.

As Christians, we should also make provisions for tithes and offerings. Since you do know that we are only stewards and that God owns it all. Don’t forget to give God what belongs to Him. As you pursue Him, remember to follow His instructions too. He put them there for your own good.

Seek financial literacy and accountability.

As you budget, remember that you need to go beyond what you are doing and understand why you are doing it. And this is why it is imperative to seek financial knowledge. You can read books on budgeting as this will help you change your relationship with budgeting. Before you can change your life, it is important that you sometimes renew your mind. And this comes from replacing what you know with the truth.

Finding someone to keep you accountable is also essential in your journey. Remember, this is a lifestyle change and not a one-off thing. And that is why you will need someone to help keep you on track and center you whenever you lose track. Whether it is a friend spouse or a professional, find someone to who you will be accountable to. Successful people recognize their need for help and are not afraid to ask for it. You too should borrow a leaf from them and ask for help because you need it.

Conclusion

What has your relationship with budgeting been in the past? Are you finally going to have a budget? Remember, not planning is planning to fail. And a budget is essential if you want to experience prosperity. Even Joseph modeled that during the famine, He kept track of what they had and how food was being distributed.

God wants you to be effective and wise in all your dealings. And proper stewardship involves keeping track of what you own and what you owe.

A Complete Guide on How to Budget for Christian Millennials.

So, what is a budget?

The Importance of having a budget.

Myths surrounding budgeting.