By David & Debie Lopez
Financial freedom is not determined by how much money you make. It’s determined by how you spend what you have. The purpose of a spending plan is to tell your money where you want it to go, rather than wondering where it went.
A spending plan is about how to spend less than you earn, how to make better choices with what you have, so you can keep more of what you make. It’s about allocating limited financial resources to unlimited spending alternatives.
The idea that you should live below your means is obvious, isn’t it? It’s not as
if this is the first time you’ve heard of the concept. You know that cutting spending is hard work. But living paycheck to paycheck is much harder.
Many people hear the word “budget” and respond negatively. They think of a budget as being restrictive, too limiting, and too legalistic. Yet, in truth, a budget can be very freeing; it can bring peace and break the bonds of financial slavery.
A budget is simply a plan – a plan for how to spend the money we have. As Christians, we recognize everything we have is a gift from God. We are not the owners; we are simply the managers of what He has entrusted to us. Knowing this should give us a better perspective on how we handle money.
Living on less than you earn takes effort. You have to work at going against the flow. It takes a conscious effort to spend less on everything from food to insurance to clothes, and the fun things in life, too. Sadly, by the looks of out-of-control debt and personal bankruptcy filings, too few people are willing to put forth the effort.
Moreover, if you’re not where you’d like to be with your money, don’t assume an increase in income will guarantee a better life.
Think about it: Five, ten, fifteen years ago, your annual income was less than it is now. Perhaps it was a lot less. You believed then if you only made more money you’d be out of debt and on your way to building wealth and securing your future retirement.
Then you got a raise or changed careers. Your annual income improved, but then you added new expenses and accepted new debt. Before long you got to thinking if you only made more money, you’d be out of debt, and on your way to building wealth, etc., etc.
Then you got a raise or changed careers. You made more money. You took on more expenses, added more debt. Listen, you’re caught in a vicious cycle that insists more money is the only way to improve one’s financial situation. But it’s a myth. It’s a lie the world has told you and you’ve believed it.
You’ve proven that more money alone is not likely to change your life. However, making the decision to stop spending all of it so you can keep more of it — now that’s likely to change your life in a huge way.
No matter your current income, you can do better with what you have without giving up the life you love. We know with the right information, motivation, and encouragement
You can shift from treading financial water to achieving financial freedom. What makes us so sure? For nine years, we’ve been helping people get out of debt.
The need for a spending plan:
If you were going to build a house, you would need a house plan. If you were going to start a business, you would need a business plan. Obviously, plans are necessary in order to reach a goal.
In the Bible, whenever God was instructing His people to do something, He always gave them a detailed plan, i.e., building the tabernacle, the ark, or the temple. God gave detailed laws the Israelites were to follow while living in the Promised Land. The Bible is full of examples of the importance of planning. (See Proverbs 21:5, Luke 14:28-30)
If plans are so important to God, why do so many of us think we can manage our finances without one?
Without a spending plan, it is impossible to know where your money goes each month and whether you will have available funds for the things you need. The “not knowing” can create feelings of anxiety and fear.
When you create a spending plan, you can have the peace of mind in knowing your bills can be paid, you have funds available for emergencies, and you know what you can spend for the things you need and want.
Using a spending plan will help you identify areas where adjustments need to be made to create extra cash to meet your goals. Learn to handle the smallest thing God has put under your authority - your money.
“Therefore if you have not been faithful in the use of worldly wealth, who will entrust the true riches to you?” Luke16:11
Conclusion:
The financial goal of all Christian families should be to live within their means. This means they spend no more than what the family makes on a monthly basis. Ideally, this means to live on a cash basis and not use credit or borrowed money to provide for their normal living expenses.
It also means the family controls spending and keeps wants, needs, and desires in their proper relationship. However, when income barely equals outgo, the family finds itself in a situation in which a decision must be made: make more money or spend less.
If making more money is not a logical or attainable option, the second option, spending less, must be instituted. This option is best realized when a spending plan and disciplined spending are maintained.