5 Budgeting Tips to Build Discipline into Your Spending – Part 1

Do you inwardly cringe when you see the word “budget”? Does the sound of the word bring with it a sense of dread? I even have the nerve to put the word “discipline” into the post title. You may have thought of creating a budget for you or your family, but, never quite completed the job. There was not enough internal motivation or external push at the time, so the effort was relegated to the pile of started, but, unfinished tasks. Well, having a budget is a giant step toward building discipline into your spending.  

So, Why Do I Need a Budget?

So, “Why do I need a budget?” you might ask. In the midst of a financial crisis, it’s even more important to know where your money is going. A budget is a spending plan. It allows you to see the various buckets of your income and spending grouped together in way that you can easily see if you are achieving your financial goals, or heading for trouble. Trouble hits when you are spending more than is coming in. You could be making a six-figure income, but, it’s not what you make, it’s what you are able to keep in your control that matters most. Using credit to make ends meet definitely does not help your financial stance.

Most folks know what being “broke” means…having little or no available cash, no savings, out of money, strapped, or down-and-out.  The word “broke” has the connotation of being a temporary situation. That is, you’re only “broke” until your next paycheck clears the bank. If “broke” is where you are, you don’t need to stay there. Creating and sticking to a budget is a means to stop living paycheck to paycheck.

The question is: “Do you want to continue managing your money so that you are “broke” before each payday”? Or, do you want to develop a spending plan that allows you to give as the Lord instructs, to beat debt, to send your children to college, to build that retirement nest egg, or whatever goal the Lord has given you?

What Does a Budget Provide?

Here is what a budget provides:

• a sense of control over your spending;
• an organized view of income vs. expenses;
• a framework within which to operate;
• improved awareness of the flow of your money during the month; and a
• method for achieving your financial goals

My husband and I have been married for more than twenty years. I handle the household expenses. Before I started our family budget, I would experience great anticipation when I knew a payday was close at hand. Then, a few days afterward, I’d be wondering what in the world happened to our income. It was as if our dollars had evaporated. After being consistently frustrated month after month with not knowing where my family’s money was really going, I decided to change my thinking from “dread” concerning creating a workable spending plan, to avid interest and motivation. What I learned immediately was what a budget is NOT!

What A Budget is Not

A budget is NOT:

• a straightjacket keeping you from spending the way you really want
• a plan you make and never look at again
• impractical
• unachievable
• a pain in the butt

I take that back. It can be a pain, but, that’s where the discipline comes into play. A budget is not a “Set It and Forget It” type of instrument. It must be managed regularly. When you can see that the benefits far outweigh the time it takes to use your budget to manage expenses, you have no problem with creating and maintaining one for your household.  

Eventually, you become so familiar with the rhythms and flow of your spending and income that you intuitively know when to conserve and where you have some leeway. More importantly, you know that your spending plan can create opportunites to build up a savings which serves as a buffer against the unforeseen. Now, let’s lay the groundwork for understanding the foundational aspects of developing a budget to help control your spending and achieve your financial goals.

5 Budget Principles

There are 5 key Budget Principles that I’d like to share with you on building discipline into your spending through creating a budget.

1)      Know Your Money Flows: Income vs. Expenses vs. Savings

2)      Use Technology for Tracking and Monitoring

3)      Give Your Dollars a Job: Put ‘Em to Work

4)      Weigh Immediate Gratification vs. Your Money Goals

5)      Look Up and Out

I will cover Budget Principles #1 & #2 in this post, Part 1. Then, in Budgeting-Building Discipline into Your Spending – Part 2, I will get into Principles #3-#5. Now, to Principle#1.

Budget Principle#1: Know Your Money Flows: Income vs. Expenses vs. Savings

According to Deuteronomy 8:18, the Lord gives you the enabling power to obtain wealth, resources, provision, and money. The money you receive is an extension of you and your thoughts. You have the power to direct it where you will. So, your money will flow exactly where you send it. If you are not paying attention to it, your money flows where you may not want it to go. Your financial success is a function of the degree to which you are mentally aware of your money flows. A budget places a framework around daily spending. As a result, your money will flow with greater intention. And, there are rewards for great financial stewardship.

You can measure your financial management success over a specific period. I suggest using a pay cycle, or a group of two pays as a budget review period. A budget review period is a time frame over which to measure your success in properly managing your money flow. As you complete a review period, look at your spending to understand trend and pattern. You’ll know if some bill is out of kilter. You’ll know if you were overcharged. You’ll be reminded of things that you should have possibly waited to buy, or errors that you made. You begin to put the whole spending picture together as compared to the money that flows into your control.  You would repeat the budget review after each period, gathering direction and honing your ability to achieve your financial goals.

When you are reviewing actual spending vs. your budget, ask yourself questions like:

• Did I meet my financial goals this period, or not?
• If I did not meet my goals, why not?
• Is there some tool or training that I need to be more successful?
• On what can I congratulate myself for a job well done?

This review process provides corrective actions for moving forward and at the same time gives you an opportunity to say to yourself, “You Go, Girl!” when a goal is reached. Ok, so, this may seem like way too much work. But, is it easier to be broke and in debt, or to develop spending discipline and achieve your financial goals? Admittedly, this budgeting process takes effort. In time, when you see yourself and your family achieving their goals, the end justifies the means.

Budget Principle#2: Use Technology for Tracking and Monitoring

You may find during your budget reviews that you need more efficient tools than paper and pencil. Having personal and business bank account information accessible online creates the kind of real time visibility you need to manage your spending on the fly. You can determine your balances, see if a check or deposit has cleared your account, and even review your investment portfolio. There are iPhone and Android apps which make tracking spending vs. budget plan a snap. You can readily track your savings and money market fund status quite readily. Whatever tools suit your personality and style you can explore. Choose tools which make it easy for you to remain disciplined.     

God’s Promise of Abundance

The budgeting process can take some getting used to. As we are persistent and consistent in using budgeting as a tool, our finanacial ppicture gets brighter. As Christians we have God’s promise in Ps 37:18-19. We will not be ashamed in evil times, but we will have abundance. When our lives honor God, the inheritance we receive from Him abides forever!

^37:18The LORD knows the days of the blameless,
And their inheritance will be forever.
^37:19They will not be ashamed in the time of evil,
And in the days of famine they will have abundance.

In Budgeting-Build Discipline into Your Spending – Part 2, I am going to give you the rundown on Budget Principles #3-#5. So, whether you are techno-savvy with a spreadsheet-based budget, budgeting software, or not, everyone can relate to finding ways to reach their financial goals. I hope by now, that I have convinced you to create your own spending plan. Check out “Budgeting-Build Discipline into Your Spending – Part 2”.

To Your Budgeting Success!

Please offer your own budgeting tips below.