How to make a Personal Budget

From YWAMKnowledgeBase

How to Make a Budget

Jesus encouraged planning for the future (e.g. Luke 14:28-32) and making sure we can finish what we started. He also encouraged good stewardship. (Matthew 25:14-30). A budget is a financial tool that enables us to estimate and keep track of money so that we know whether we can achieve our goals or how near or far from them we will come.


Set Some Undisturbed Time Aside to Consider Your Budget

  • Estimate your likely income over the next year. List this under the heading of "Income". (under estimate!)

Under a Heading of "Expenditure"

Work out in as much detail as possible all the areas on which you will spend money:

(for person living on base)

  • Food
  • Rent
  • House Contents Insurance
  • Medical Coverage
  • Income Tax, Local Taxes
  • Holidays (Christmas, Summer)
  • Car (Petrol, Tax, Insurance, Service, Repairs, using base vehicle)
  • Clothing
  • Phone, Internet, E-mail
  • Outreaches
  • Conferences (plan one base retreat and one national/international conference/Study books)
  • Correspondence (newsletters, stationary)
  • Spending money (leisure, free time)
  • Gifts and Tithes
  • Extra Medical Expenses (dentist, glasses, etc.)
  • Transport (travel cards)
  • Household (cleaning fluids, furniture)
  • Pension (State or Private)

Families:

  • School's expenses (stationary, trips, uniforms)
  • Child Care and babysitting
  • Clubs
  • Equipment (pushchairs, cots, etc.)

Try to Estimate as Accurately as Possible How Much Money You Will Spend in Each Area.

It helps sometimes to estimate in terms of weeks or months and then calculate for the whole year.* Search out old bills and see what things cost.

  • Ask others what their bills are for certain services. (e.g. Medical fees)

Try to Slightly Over Estimate the Expenditure

  • Estimate the shortfall or surplus money (Lets hope its the latter!)
  • Trim the budget to make sure there is no shortfall - this may mean not doing some of the things you want to, or cutting back on your spending.
  • Show the budget to some trusted, wiser people and ask for their input and criticism. Make the changes they recommend!
  • Now keep a rough track of your budget. Keep it handy and every month or so compare your estimate to real costs. Note that it doesn't really matter if an area goes under or over - the budget is just a tool that should give you advance warning of any major problem and help you to avoid problems in the first place.


Example budget

Budget for a family of 6 (2014)
UK citizens, living near Reading, UK
INCOME
GBP
UK gifts – SKI
21,200
UK gifts – Stewardship
4,800
Eurozone giving
10,483
One off gifts
200
Honorariums
300
UK Child benefit
3,146
UK Working tax credit + Child Tax credit
unknown
UK income in Sterling
40,129
EXPENSES
GBP
GBP
Pension: Voluntary contribution UK State scheme
281
Giving and tithing
3,600
Income Tax (approx – less missionary expenses and home office)
450
4,331
Missionary Life
Conferences
300
Training (any books etc)
150
Travel (mission trips)
500
UK support raising
250
EU support raising
350
Computer costs/Telephone costs
300
1,850
Car maintenance (Assume 15,000Km per year)
Matriculation/Tax
260
Insurance
1,000
Breakdown cover
150
Servicing, repairs and tires
550
Fuel
2,080
4,040
Accommodation expenses
Rent
13,200
Water
500
Gas and Electricity
1,560
Local Taxes
2,000
Insurance – house
100
17,360
Health
Dentist fees
200
Medication
200
Eye care – Opticians (2 adults and one child)
420
820
Other
Food and household items
7,800
Clothes
1,000
Holidays
1,000
Phone rent, Internet and TV (less call costs above)
420
TV Licence
146
Mobile Phones
360
Public transport
372
Bank fees (including 100 GBP in foreign transfers)
50
School (uniforms/extras)
300
Christmas
500
Gifts
500
General Spending
2,600
Household repairs/furniture
400
15,448
Total Expenses
43,848
Balance (shortfall – to raise!)
-3,719

25px-Pdf.png Example Budget