You’ve tried to budget in the past, haven’t you?  Come on, be honest.  We all have.  You’ve tried excel spreadsheets, quicken, mint, your checkbook register, and some of you brave souls have even tried the envelope system.

Why hasn’t it worked for?  Why did you give up?

One simple reason is that you called it a budget

The word budget has nothing but negative connotations and it’s the financial equivalent of a diet.

Who wants to diet?  Who wants to give up what they enjoy and deprive themselves?

It’s easy actually – those that want the results more than they want the temporary pleasure.

Don’t worry, I’m getting to how to actually create a Spending Plan that works, but don’t skip over the psychology and the why.  It’s our emotions and our behaviors that dictate our financial success, not our intelligence.

You want to call it a Spending Plan because that describes your objective, your purpose.

You want a plan for how to spend your money…rather than wondering where your money went.  You want to be intentional, purposeful, prayerful, and you want to make these decisions before you are house hunting or in the car dealership or at the mall or on vacation or at the restaurant or wherever you tend to overspend.

Does that make sense?  Good, now let’s get down to business.

The first thing you want to do is write down where you want to spend money on a piece of paper.

Yes, you can use excel if you just can’t stand to write anymore.  You want this to be very simple, big picture, round numbers, and the important piece is you want to prioritize these expenses.  For example:

  1. Giving – $2,000
  2. Saving – $2,000
  3. House – $3,000
  4. Food – $1,000
  5. Kids – $1,000

You can create subcategories if it’s easier to tally numbers (i.e. gas, oil changes, repairs, etc. under Cars).  But resist the temptation to be precise.  Let a computer do that for you later.

You want to think about what’s really important to you, even if you aren’t doing it now.  If paying off debt is important and you’re only making minimum payments, then write down the number you want to pay towards your debt.  If you aren’t saving, then write down the number you want to save.  If you aren’t giving…well, you get the point.

Then, remember, you want to list those in order of importance to you.

If vacations are the most important thing and you won’t live without them, then put that at the top.  Be honest with yourself.

When you finish this exercise, your expenses will almost certainly be greater than your income.  This is normal and this is why it’s important to go through this exercise.  Don’t be discouraged.  Just recognize that this is your reality.  If you want to prioritize those things that are important to you, then you have to cut out some of the expenses that aren’t necessary.

You see, you don’t give up golf or eating out or clothes or massages or house cleaning or whatever because you’re on a budget.  You do it because you realize there are priorities/financial objectives in your life that are more important to you.

Unless you write this out on paper, talk to your spouse about it, talk to God about it, and acknowledge it, then this will always be another “diet” that doesn’t get you anywhere.

You have to dream of the peace you’ll have when your head hits the pillow, the removal of strain in your marriage, the lessons your children will learn.  You have to visualize your future self free to give generously to your church, to support young missionaries, free to travel the world, free to find work that is truly meaningful, free to spend time with adult children and grandchildren, free to do whatever God calls you to do!

It’s these dreams and values and goals that are truly important to you that will keep you motivated to forego the little luxuries you’ll have to give up.  Because we all have to give them up.  There is only a fraction of a percentage of people out there who actually have high enough incomes to spend frivolously and still get to where they want to be long term.

We’ve all heard the horror stories of athletes and entertainers that made hundreds of millions of dollars and lost it all.  None of us can spend like there’s no tomorrow and not suffer serious consequences.  It all comes back to figuring out what’s most important to you and then sticking to it.

So, now you’ve dreamed the good dream and you know what you want.  Now it’s time to start slashing those expenses that will stand in your way of achieving your dream.

Now it’s time to start slashing those expenses that will stand in your way of achieving your dream.

Remember, this isn’t a “diet”, this isn’t “restrictive”, this isn’t taking away your fun.

This is prioritizing what’s really important to you.  This is character.  This is a practical step to being the man or woman you want to be, the man or woman you respect, the man or woman God has called you to be.

Remove and reduce all unnecessary expenses until your total expenses match your total income.  Now, you have a Spending Plan!