If you have come this far and have determined your budgetable income, and all of your monthly bills and expenses, then it is time to balance your budget. This blog will walk you through that process, as well as give you some great encouragement along the way.
God has not given you a spirit of fear, but of power, love, and a sound mind. As we face your budget today and try to determine how to bring balance. I just want to remind you of that verse. This is the time that many people want to get into fear when it comes to their budget. Fear that there isn’t enough, fear of deprivation, fear of knowing… None of this fear is from God. He is not in your fear. Neither is He controlled by your fear. Let go of your fear of the unknown and face your budget. God is with you today.
So… balancing day. How exactly do you do it? The idea behind it is that you want to enter all of your expenses and still have surplus, even if it’s only a little bit, left from your income. Now, a new friend named Ashley left a comment yesterday asking a question that I just want to address quickly. He asked, “I get my salary once a month, (end of month), all my bills are debited or paid by the 2nd of the month. I therefore have no expenses (bills) to pay by the middle of the month. Should I still be putting my salary into 2 portions?”
Now, Ashley’s situation is unique in that all of his bills are being automatically debited on the same day each month. I wish all of us could do this because it makes bill paying so simple; however, for most of us, our bills are due at all different dates during the month, with many of them having inflexible due dates. Utility bills, for example are often set with inflexible due dates because they are dependent on when the company comes to check your meter and they often give you only a few days to make your payment once they bill you. However, for Ashley, no I would not complicate by dividing up what is already so simplified for you. I would leave all of your bills coming out of the first of the month as they do, but I would divide up your discretionary funds. So your budget might look something like this.
If your situation is similar to Ashley’s in your income setup, but not in the way that your bills are paid then I would typically still recommend dividing your monthly income in two. This will enable you to divide your bills into two sections (please see my blog “Simplicity”) and not have to be constantly managing your bills all month. It enables you to only have to sit down twice a month and work with the bills that are due. Also, I have discovered that if you take your entertainment money, or grocery money (for example) all at once, it is very rare to have anything left by the end of the month. Typically you spend it all in the beginning, and really struggle at the end.
So for today’s topic of balancing your budget, I am going to continue to address the issue from a position of dividing your income into two sections, since this is going to work best for most people. The very first thing to look at when starting to balance your budget is your mortgage/rent. Your mortgage/rent is typically the biggest bill that you will have in your budget. So when you enter your mortgage amount into the budget it may take the majority of your first of the month budgetable income. So from there you need to choose the bills that are going to best fit with your mortgage and not cause you to go over.
So let’s say that you have inputted all of your bills due on or after the 1st into your beginning of the month section and you are two hundred dollars over the amount of your income. There are several solutions to that. The first is to identify the bills that do not have fixed due dates such as Savings, Giving, Car Insurance, Infrequent bills that you are saving for, Groceries, Gasoline, Entertainment, etc. These expenses can easily be moved between sections and allow you to try to move your expenses around. You can even divide these up and pay them in both sections if that is what works best for you. For instance, I have a section for savings in both my beginning of the month and middle of the month sections. So lets say I save 300 dollars a month. I might have 150 coming out of each section, but if I need an extra $50 as I am balancing my budget, I might reduce my savings amount to $100 in the first section and then increase my savings to $200 in the second section.
A second solution is to look at the bills that have semi flexible due dates close to the first and to move them to the middle of the month. These might include bills like your retirement savings, insurance, or credit card payment… anything that you can call and request a different bill due date or automatic payment date. Companies will typically be happy to bill you earlier or to debit your account earlier, so it might just require a simple phone call to move your due date for a bill if you absolutely cannot get your budget to balance without doing that.
So now, what if the issue is not having too little money in the beginning of the month and too much in the middle of the month? What if your issue is not having enough money for your total? What if once you enter all of your bills, both sections are in the negative, meaning that you have too many expenses for you income? Don’t get in a panic. This is just your moment for discovering why you are in debt. If your outflow every month is always more than your income, then the only possible result is going to be debt. So don’t despair, this is just your answer to why you are in debt, and it is a great thing to discover or you can never change it. It is simply time to re-evaluate your “necessary” bills, as well as your discretionary (meaning flexible) expenses. Are you spending too much on impulse purchases for clothing and eating out? Can you reduce your grocery budget? Are you killing your budget through all of the presents that you buy for other people (a topic for another day)? Are you living beyond your income in your new car payment or in the vacations that you take each year?
These are very hard questions for many people, and for some reason seems to stir up all kinds of fear. Fear of deprivation, and having to give something up, fear of being controlled, fear of not getting to do what you want to do. I want to remind you again… “God has not given you a spirit of fear” Ask Him for the wisdom to know what to change and how to live within what He has given you to live on. Surrender your desires and your fears. Your heavenly Father loves you and He knows what you need. Sometimes His answer may even be a job with better pay or a raise, or His answer may be to give you the wisdom to manage what He has already given you. However, it is really amazing when you begin to live within your income and with gratitude, how quickly increase will come in your life. It is just so true in so many circumstances, when you get happy where you are, and learn to be content whether you have a lot or a little, God always brings more. Again, He is after your heart, so let Him have your heart, your fears, and your trust in your finances, and you will be amazed at what He will do.
The picture at the top of this blog is entitled “Perfectly Happy”. It was the first picture that came up when I did a search for the word “balance”, and somehow I think that is significant. As your budget comes into balance, as you weigh the plan to live within your means, as you face what lies before you, I think you come to a place of acceptance and peace. I don’t think you can ever be “perfectly happy” when you are in fear and denial and your entire life is out of balance, but in the truth comes freedom, in the light comes answers, and in the place of balance you will often find happiness… or at least a reprieve from constantly falling off the beam and into debt… and that really is a happy thought. But even if you have just discovered that you have fallen off the beam, God is with you. He is for you, and just like a Daddy helping his little toddler to walk for the first time, God is so excited to help you to come to the place of balance.