Making and sharing budgets as a community practice
Posted: January 5 2012
Tonight we’ll be doing our annual budget share at our Tribe gathering. Over the past couple of years when we’ve done budget sharing, we’ve realized that this practice is more than just being vulnerable about the numbers– its really about sharing our hopes and dreams for the life of love and service God has for us– and the resources we need to live into that vision.Our hope is that by sharing our life and financial goals, we can better understand, support and pray for the provisions we each need.
As we’ve done this practice over the years, it became clear that seeking the way of Jesus with our resources requires a different prescription for each of us. Some of us have needed to curb our spending and deal with debts or consumptive habits. Some of us have needed financial help and prayer for better-paying work. And some of us have needed to get more creative and daring about spending the resources God had given us.
Here’s an exercise we’ve used to connect financial planning with our deeper values:
FINANCIAL PLANNING:
Simplicity is aligning your resources (time, money, possessions, talents) with what matters most. Having clear life goals will help you make better decisions about what you earn and spend.
What are your current top 3-5 general life goals?
1. _____________________________________________________________
2. _____________________________________________________________
3. _____________________________________________________________
4. _____________________________________________________________
5. _____________________________________________________________
What kind of time, money and resources are needed to fulfill these goals? Think through your longer term financial goals.
Examples:
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- A down payment to eventually purchase an apartment/home.
- Transition to a new career or lifestyle change (that might pay less or require more risk, but seems more fulfilling).
- Freedom from financial/work obligation to take time for service or travel.
- Preparing for a future event: a wedding, children’s college, a special trip, lower earning/retirement)
- Creating a “means of production” (i.e. An income generating business or investment)
- An amount of money or a resource you would like to share and bless others with.
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1. _____________________________________________________________
2. _____________________________________________________________
3. _____________________________________________________________
4. _____________________________________________________________
5. _____________________________________________________________
Think through your top 3-5 immediate/ short-term financial goals:
Examples:
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- Reduce and eliminate consumer debts or pay off school loans.
- Save for upcoming fixed expenses (car maintenance/ new car, medical & dental work,home repairs)
- Set aside a reserve amount in case of emergency/ job loss. (two months salary suggested)
- Save for schooling, travel or sabbatical you would like to take.
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1. _____________________________________________________________
2. _____________________________________________________________
3. _____________________________________________________________
4. _____________________________________________________________
5. _____________________________________________________________
BENEFITS OF USING A MONTHLY BUDGET:
1. A budget can help you live more reflectively and less reflexively—reigning in the chaos of your time and finances.
2. Budgeting is a spiritual discipline akin to prayer, study, silence and solitude that is related to the practice of simplicity. How you deal with money determines, to a great extent, how you will live your life.
3. You will have a realistic assessment of your true financial situation.
4. You will be able to clearly identify where your money is going and where you should allocate differently—a logic approach to determine what you should save and when you can spend AND what to pray for and when to work more or find a better job.
5. You will have less anxiety about money because you will know what you can and can’t spend.
6. You can see clearly how God is providing for your financial needs.
7. You will have greater clarity about what you need to trust God to provide for you.
8. You will have greater financial & vocational freedom because you will know the minimum amount you need to live.
9. You will be empowered to be more generous and intentional about charitable giving.
BASIC TOOLS FOR BUDGETING:
1. List your current estimated income.
2. List your current expenses—first basic necessities & liabilities then discretionary options
3. Compare projected expense with estimated income.
4. Assess whether spending in specific areas should be reduced.
5. If spending and earning still do not match, brainstorm ways to simplify, eliminating discretionary expenses and conserve spending.
6. Asses whether debts can be paid off more rapidly with decreased spending in discretionary areas.
7. Plan and allocate for upcoming expenses.
TOOLS FOR TRACKING YOUR BUDGET AND SPENDING:
1. Track your monthly earning and spending using Quicken, Mint or a simple spreadsheet that tracks your spending according to your established budget.
2. Decide how you will track and pay for each category of your budgeted expenses.
• With draw cash for specific budget categories (food, entertainment, allowance)
• Use Credit/Debit card only for certain predictable expenses (gas, travel, on-line)
• Pay regular bills with a personal check or online bill pay (giving, rent/mortgage, utilities, etc)
3. Pay credit cards off at the end of each month and put your bills on auto payment.
4. Have a place where you keep financial files and a regular time each month when you pay your bills and pay your bills on time.
5. Resists and restrain yourself from spending money that is not in your budget.
6. Stop spending when you have reached your monthly budget maximum.
7. Delay gratification and save toward desired purchases.
