From Avoidance to Action: How to Build a Budget that Works


 

I ask a simple question, but the response is often the same:

"Do you have a budget?"

"A what?"

"Do you have a spending plan so you know where your money is going?"

"Ummm... no."

"How do you keep track of your money?"

"We don't."


That feeling of dread, of wanting to keep your head in the sand—I can understand it. It feels easier to just worry about money when a bill collector is calling. But they will call, and sometimes they will even take a piece of your income. Working in Human Resources and Payroll, I saw it happen on a regular basis. I would call an employee to let them know a garnishment had come in, and the common response was, "What do you mean? I was never informed about it," or, "Which company is garnishing now?" Not tracking your money and not paying your bills will only lead to more problems.

In my own family, there were periods when our income didn't cover our expenses. We didn't budget because we didn't want to see the deficit. We became familiar with the resources available from the state, our church, and various charities. It was a true testament to how God provided for us in everything.

The Bible gives us a powerful perspective on this:

"And he said to his disciples, 'Therefore I tell you, do not be anxious about your life, what you will eat, nor about your body, what you will put on. For life is more than food and the body more than clothing.'" (Luke 12:22-23)


And just a couple of chapters later, we are called to be wise planners:


"For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, 'This man began to build and was not able to finish.'" (Luke 14:28-30)


These verses remind us of a powerful truth: God is our provider, so we can release our anxiety. But in that trust, He also calls us to be wise stewards who plan and count the cost. The solution to our anxiety isn't avoidance—it's preparation.

Why Budgeting is Essential

  • Gain Control: A budget give you a clear picture of your income and expenses, putting you in the driver’s seat of your financial life.

  • Achieve Financial Goals: Whether it’s saving for a down payment, paying off debt, or building an emergency fund, a budget helps you allocate funds strategically towards your aspirations.

  • Reduce Financial Stress: Knowing where your money is going and having a plan can significantly alleviate anxiety about your finances.

  • Identify Overspending: A budget helps you pinpoint areas where you might be spending more than you realize, allowing you to make conscious adjustments.

  • Prevent Debt: By living within your means, you can avoid accumulating unnecessary debt.

Budgeting Basics

Step 1: Get Honest with Your Spending (The Spending Plan)

Before you can tell your money where to go, you need to know where it's been. This first step is all about awareness. For one month, track every single dollar you spend. That means coffee, groceries, gas, subscriptions—everything. You'll be amazed at what you discover.  Use this month to also look at a calendar and track all those expenses that come up once a year, birthdays, vehicle registrations, app renewals, lump sum payments, etc, notate when you usually spend the money for that event.  

You can complete this task in a notebook, on a spreadsheet, or if all your transitions are completed electronically you can use a budgeting app. Apps like EveryDollar, Honeydue (for couples), or YNAB (You Need A Budget) can connect to your bank accounts and automatically categorize your transactions. This takes the detective work out of tracking and gives you a clear picture of your spending habits.

Step 2: Create Your Budget (The Blueprint)


Now that you have the data, it's time to build your spending plan. This is where you proactively decide where every dollar of your income will go. This is a zero-based budget—income minus spending equals zero.

You can use a simple budget template or a spreadsheet to get started. List all your income at the top. Below that, create categories for your expenses:

  • Giving: This is your first priority.

  • Saving: Your money goals start here.

  • Needs: Rent/mortgage, utilities, groceries, transportation.

  • Wants: Dining out, entertainment, shopping.

The key to a good budget is to make it realistic. Don't starve your budget for groceries, or you’ll end up buying more food out. Budgeting isn't about perfection; it's about progress. The Consumer Financial Protection Bureau offers some tips for Budgeting for needs and wants.

Step 3: The Art of Saving


Saving isn't what's left over at the end of the month; it’s a non-negotiable line item in your budget. This is how you build a financial foundation.

  • Emergency Fund: Your first savings goal is a starter emergency fund of $1,000. This is your safety net for unexpected events, so you don't go into debt for a car repair or a medical bill.

  • Sinking Funds: These are a form of targeted savings for planned expenses. Use a budgeting planner or app to create sinking funds for things like car maintenance, Christmas gifts, or a family vacation.

By planning for these expenses, you'll never be surprised by them again.


Step 4: Putting Your Budget to Work (Practical Tips)


A budget is a living document, not a one-and-done task. Here are some budgeting tips to make it work for you:

  • Hold a "Money Date": If you have a partner, schedule a regular meeting—weekly or monthly—to review your finances together. This fosters teamwork and prevents money from being a source of conflict.

  • Talk About Money: Make it a regular topic of conversation, free from shame or secrecy. This is the best way to get on the same page and align your financial goals.

  • Start with "Why": Connect your budget to your dreams. You’re not cutting out lattes for no reason; you’re cutting them out to build wealth, pay off debt, and take that dream vacation.

  • Automate Everything: Use your bank’s automatic transfer features to move money to your savings accounts and investments the moment you get paid.


More to Explore:



Step 5: The Ultimate Goal (True Wealth)


As you master your budgeting finances, you'll realize that building true wealth isn't about a specific number in a bank account. It's about a deep sense of peace, security, and the freedom to live and give generously. Ramsey solutions offer the Baby Steps as a good process to true wealth.

Your budget is the vehicle that takes you there. It allows you to align your spending with your values, so your money is working for you, not against you. Don't let the noise of the financial world dictate your journey. Create your own roadmap, stick to it, and watch as your financial life is transformed.

Ready to start your journey? The most important step is simply to begin. Grab a notebook, open a spreadsheet, or download a budgeting app. The destination of financial freedom is waiting for you.

Want someone to walk with you down this path of Budgeting? Schedule a call today!


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