Hopefully I am convincing you to develop a budget if you do not already have one. The best way to build a budget is to start by writing down everything you spend for a three month period. I mean everything. This will at least give you a window into what categories to set and what a yearly budget could look like. After three months of collecting data, you are ready to take your first stab at setting a budget. Only now instead of just tracking what you are spending, you decide how much you want to spend in a certain area.
Expenses and income must be calculated on a monthly basis. Some bills like your electric bill already come monthly. Others, like maybe your trash collection, might come every three months. Then again your paycheck might come every two weeks. All these transactions are averaged into what they are monthly and this gives you a basis to compare, track past expenses and project how much you want to spend in the future by budgeting. You might be above or below for a certain month; however, your expenses should be evaluated quarterly to see if they are on track.
I will not go into a detailed lesson on budgeting since this will be read in various countries with different currencies and various costs of living. I have included a sample North American budget in A Practical Path to a Prosperous Life in Appendix E. Many financial teachers have done a lot of work in this area and have done a far better job than I do. There are a lot of budget helps available on the internet or by purchasing software that helps you with budgeting. Don’t’ wait…start now. Take dominion over your finances. It will make you more prosperous.
In the last post we were discussing covenants and how they affect our finances. It is important to note that for those of us who are married, the single worst financial decision you could ever make is to break the marriage covenant with your spouse and get a divorce. This is the most important boundary to keep in place. The wisdom of Proverbs backs up this idea when discussing the pitfalls of immorality and the adulteress women. Simply stated, in addition to all the other pain associated with the violation of the marriage covenant, it will lead to financial ruin:
Keep to a path far from her, do not go near the door of her house, lest you give your best strength to others and your years to one who is cruel, lest strangers feast on your wealth and your toil enrich another man’s house (Proverbs 5:8-10).
Your budget should contain money set aside to nurture this most important relationship in your life. This is an investment you cannot afford not to make. In the book The Millionaire Next Door, data shows that most millionaires are married with an average of three children. Family is very important to them. It is a prosperous mindset to keep the agreements you have made and to value your spouse, children and grandchildren.
So spend some money on your spouse today.
A budget helps establish boundaries that you want in place. You have to fulfill the financial commitments you have already made before you start to spend on new commitments. For example you have made an agreement with the electric company when you asked them to provide electricity to your home. If you give money to a homeless person on the street when you can’t pay your electric bill, you are stealing from the electric company and breaking the commitment you made with them. This is stealing and Christians who steal will not prosper. God cannot bless people who steal and break financial commitments they have made. Those unaware of this simple, profound truth will find it difficult to get ahead financially.
If you rent a video when you haven’t paid your house rent, you are stealing from the person from which you rent your house. If you pay your neighbor’s rent when you have not paid your own, you are stealing. Also, in taking responsibility which is not yours, you will interfere with what God is doing in the lives of others. When we try to “save” other people, we often times teach them to be more dependent upon people like us. In fact, often times the recipient ends up resenting us.
To help the poor you can’t be one of them
Boundaries are good! Take care of those inside your boundaries before giving to those outside. God will give you authority only over that for which He has given you responsibility. You have a covenant to provide for your family. You do not have primary responsibility for other children. To help the poor, the best thing you can do is not be one of them. By keeping your commitments, you can bless many children. You cannot save the world when you can’t pay your bills. It doesn’t work that way.
Tithing benefits the person who is doing it. In Winds of Change, Rick Joyner says:
Abraham the father of faith, paid tithes hundreds of years before the Law, which is noted in the New Testament (see Hebrews 7:8-9) because the writer of this book was reminding Christians of this. Under the New Covenant we are a part of the Melchizedek priesthood and Melchizedek received tithes. If this was not more clearly spelled out, it is only because it was so obvious that it did not need to be.2
Alan Vincent, a church planter and trainer from San Antonio, Texas, gives the example of someone who came to him saying, “I can’t afford to tithe and make my house payments.” Alan told him to tithe in faith and if he couldn’t pay his house payment then Alan would cover it for him. The young man started to tithe and he never came back to Alan because he couldn’t make the payment. In fact, Alan observed that he soon received a promotion and a new car.
Jerry Stoltzfoos is an Assembly of God church planter and senior pastor from Gettysburg, Pennsylvania. He has planted multiple churches. He teaches on tithing and actually guarantees that the church will pay back a person’s tithe if they don’t see a significant blessing or turn around in their finances after they start to tithe. He has been saying this for many years and has not paid back any tithes to date.
Simply stated, I am recommending that the number one building block of your personal financial budget should be the ten percent tithe to God. If you get involved in his 10% he will get involved in your 90%.
Gene Strite is a church leader, author and businessman from Chambersburg, Pennsylvania, who takes tithing a step further. When he was a pastor his goal is to teach everyone to tithe ten percent and save ten percent. The saving ten percent will also give people the money they need stored up for financial opportunities that come their way.
Harold Eberle, a former pastor who is now a traveling teacher and author from Yakima, Washington, relates that as a local church pastor he spent four continues weeks teaching every Sunday on the principle of tithing. He instructed everyone to write their current income inside their Bible cover. At the end of four months of tithing, 80% of the congregation saw an increase in their income or some kind of financial breakthrough.
The tithe is a biblical principle found throughout the Bible, and all of your budget should be built around this ten percent. Abraham tithed to Melchizedek before the law was in place, it was included in the law and Jesus affirmed it after he fulfilled the law. Malachi speaks of the tithe:
Will a man rob God? Yet you rob me. But you ask, “How do we rob you?” “In tithes and offerings. You are under a curse-the whole nation of you—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. I will prevent pests from devouring your crops, and the vines in your fields will not cast their fruit,” says the Lord Almighty. “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty (Malachi 3:8-12).
I have tithed all of my Christian life, and I know that it works. The tithe is the first ten percent. Giving starts after you have paid your tithe into the storehouse. I am not looking for an argument or debate. No one is forcing you to tithe. Sometimes Christians think tithing is something they are forced to do by the church. It is not. Tithing benefits the person who is doing it. That works for me.
Cyril Parkinson first wrote “Parkinson’s Law” in 1955 to define the nature of government bureaucracies to expand and never get smaller1. It could be generally stated as the following. “The demand upon a resource tends to expand to match the supply of the resource” or as what is helpful for our discussion about budgeting and sometimes now known as Parkinson’s second law, “expenditures rise to meet income”. Simply stated…as your income rises so will your expenditures naturally rise to distribute that income. We know this is true. Unless a budget is developed to control the spending and provide for savings and investing, the money will disappear. Savings also eliminates the feeling that your finances are out of control and brings a sense of freedom and dominion.
A few years ago I was teaching in a financial seminar. Dave Yarnes, a businessman from Charlotte, South Carolina, was also speaking at this conference on the subject of wealth accumulation. Dave is the owner of multiple businesses and is involved in many projects helping the poor in developing nations. He stated an interesting concept about wealth accumulation. He and his wife decided what standard of living they would live at independent of how their income would increase. He feels this is one reason the Lord has blessed them with considerable resources to extend the kingdom of God. This is another reason to budget and plan how much it costs you to live.
Personally, I want to know how much I gave away last year so that I can continue to challenge myself in giving. I want to know how much I spent on food to feed my family last year so I can plan to feed them this year. I want to know how much I am spending on vehicle maintenance because this helps me decide when it is time to get a new car that takes less maintenance. I want to know how much I am spending on interest each year because interest can sometimes be the biggest killer of giving, savings and investing. A budget helps me do all of this.
Simply stated…budgeting is deciding how much you will spend each year or month in advance. Do you remember how I said that prosperous people don’t make emotionally based financial decisions and this is why they don’t generally respond to emotional appeals to give money? Well, if you decide in advance what you are going to spend by setting a budget, then you won’t make impulsive, emotionally driven purchases. Instead your purchases will be smart, faith-filled purchases.
Every business is expected to control their costs. Why? The more they minimize costs the better the profit margin will be and the greater the reward to the owners or stockholders. So if we are able personally to budget and control our expenses, it will allow us to save, give and invest money which will make us more prosperous. There is a saying in the business world, “No margin, no mission,” simply meaning that if there is no profit then there is no incentive to function as a business. Consider your personal profit to be what income you do not spend on your living expenses. This margin then goes toward your mission.
Why is so important to know how much you are spending and where? Consider the guy who usually buys two to three dollars worth of snack food each day on his job. This doesn’t seem like very much money, however over the course of a year this adds up to $700-800. Is this wrong? Not necessarily if this is what you are planning to spend on snack food, however it is a problem if you are spending this money on impulse buying every day.
One reason that a budget is such a powerful tool for personal finances is that a budget forces a person to take personal responsibility for the money God is sending their way. When personal responsibility is taken, it puts you in a place where God can get behind you.
Susan (name changed) had grown up in the home of a single mom with a lot of needs. Without a father in her home she became noticeably insecure and in search of male affection. As she came into her teen years she cultivated a pattern of behavior that often went as follows: she would break up with a guy and go on a consolation shopping spree using her credit cards. Eventually she became a Christian and ended up in our living room with a credit card debt in the order of $15,000 at the age of nineteen. As we counseled her and explained how to get on a budget the idea of controlling spending seemed like a foreign idea to her.
Her offense was good. She made good money, but her defense had a lot of holes in it. Nevertheless, Susan submitted to the idea of a budget, and within a year and a half of us meeting with her monthly for accountability she had eliminated her entire $15,000 debt. Now she was ready to prosper, and she did. Although she did advance financially, for her the greatest prosperity was to meet and fall in love with a guy who loved the Lord and be able to enter into marriage debt free. The freedom and blessing she felt in walking down that aisle and starting married life financially free was an awesome treasure for her. Susan took personal responsibility for her finances, and it opened up the door for God’s blessing in many areas of her life.
If we don’t develop self control in our spending we will never have the discipline needed to evaluate and take advantage of the opportunities for investment the Lord will bring our way. Likewise, most of us won’t have the cash necessary to invest when opportunities come our way. Please consider this. We can probably all recall an opportunity to invest that we could not take advantage of because we did not have the cash to do it. Because of not controlling spending we miss opportunities. Jesus appointed one of the disciples to be his treasurer. Why? I presume he wanted an accurate accounting of what happened to the money they had. Do you think he still might be interested in this?
We find as we are diligent in the financial area of budgeting that God’s blessing is there. What is it that keeps us from diligence to do something simple like budgeting? In most cases it is simply laziness. As stated in Proverbs, laziness is not the path to prosperity.
Lazy hands make a man poor, but diligent hands bring wealth (Proverbs 10:4).
I heard one minister say it like this, “Where there is lack, there is slack.” What did he mean? He meant that if we are experiencing lack in our personal finances, then we should examine what needs to be adjusted in our finances, because our hand is slack in some area. Let me be blunt. If you are not willing to be disciplined in the area of your spending you will not be prosperous. Budgeting is the perfect entry level way to become disciplined in your finances. If we read the Bible, we understand that self-control is one of the fruits of the Spirit and yet many believers struggle in this area. If we want the Lord to teach us to prosper, we will have to make some changes.
Championship sports teams usually have both a good offense and a good defense. Using this analogy, let’s consider your “offense” to be your income and your “defense” to be your spending. Some people do a good job with their defense through keeping a budget, but neglect to consider how to increase their income. Other people are able to see a good income come in, but cannot be disciplined to save or invest any of the money. Can something as dull and boring as a budget help us to prosper? The answer is yes.
I usually spend most of my time teaching about the offense, which is increasing the income side. However, we will spend some time on developing a good defense here because I don’t want to assume anything. I have heard C. Peter Wagner say, “Whatever is assumed will be ignored.” I don’t want budgeting to be ignored. I have lived by a budget for most of my life and know that this has helped me to prosper. If you have been encouraged by the discussion of how to have a good “offense” financially, then hopefully you can stick with me through a short discussion of how to have a good “defense.”
We want to be as practical as possible. One of the things we have found about the spirit of poverty is that it leaves people feeling like their finances are out of control. Money seems to come in and go out quickly and there is never enough extra to really do the things the person desires. A budget allows you the opportunity to take dominion over your finances. We want to approach our finances with a quiet confidence that comes from God.