To record your expenses, you need a Money Blueprint Binder. Get yourself a small spiral notebook that easily fits into your pocket or purse. At the top of the page, write down the Category Name, for example, let’s say it is “Food”. Next, write the amount of money you have allocated this month for food. For our example, the amount you’ve allocated is 10% of your take home income.
If your take home pay is $3,000, you are going to write $300. Next, whenever you spend money, write down the date, the item purchased, and the amount you spent. As you spend money, deduct it from the starting amount.
|DATE:||CATEGORY: FOOD||ITEM PURCHASED||AMOUNT SPENT||Monthly Allotted: $300.00|
|7/21/xx||7-11||Soda and candy||2.78||197.22|
Do this for everything, even a soda. Also, do it for expenses that you pay with a check or are directly withdrawn from your checking account. The reason to this is that this gives you an accurate account of how much you actually spend each month.
If you are married, both of you should track your expenses. Therefore, each one of you should carry your own notebook. You should split the money between the two of you, so you both use cash and won’t revert to the ATM or credit card. Does this mean that you both have to carry the envelopes also?
Men might not want to carry around a plastic accordion wallet. They might think it’s not “manly”. If this is the case, then they can carry the money in paper envelopes or in their wallets. Ensure the money is separated into each category with a paperclip and a piece of paper with each category on it. (Note: Always keep your receipts. At day’s end, verify the amounts you spent against what you entered in your notebook.)
You might not want to carry all that cash with you all the time. Instead, carry what you need, such as gas money, put that in your wallet or envelope only. You don’t need to carry the Food money, unless you are going to eat out. If you are going to eat out, make sure you and your spouse realize how much that is going take out of the Food amount. Brown bagging it is better.
For the Fixed Expenses, you also need to keep track of them. On one page of your Money Blueprint Binder, label it Tithe. Another should be labeled Savings and the last Housing and Utilities.
Our Tithe category starts at 10% of our Gross Income. In our previous example, we said that the take home pay, net income, was $3,000. Let’s say that our Gross Income is $3,900. This means that taxes and other deductions are $900. Our Tithe amount is $390 and not $300. The $390 is based on our Gross Income, the income before taxes and other deductions. You also want to keep track of this in your Money Blueprint Binder.
Proverbs 3:9-10 – “Honor the Lord with your wealth, with the firstfruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine.”
Malachi 3:10 – “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”
God instructs us in His Word to bring our firstfruits, Gross Income, to Him. We are to bring our whole tithes into the storehouse, our church. God will bless whatever you cheerfully and willingly give back to Him. We don’t want to be like Ananias and Sapphira in Acts 5, who sold a piece of property, kept some money back for themselves, and then lied saying this was all the profit. They both died shortly after they lied.
For our other Money Blueprint items, we’ll use our net income to obtain our percentages. Below is an example for the Housing and Utilities category. The $750 represents 25% of the $3,000 net income. You will take 5 or 10% for Savings category, depending on the amount of your other expenses. Remember our goal is to have a zero after we subtract our expenses from our income.
|DATE:||CATEGORY: Housing & Utilities||ITEM PAID||AMOUNT SPENT||Monthly Allotted: $750.00|
|7/21/xx||ABC Water & Trash||Water & Trash||30.00||568.00|
|7/22/xx||ABC Telephone||Cell phone||45.00||523.00|
The budget must come out to zero. Your income minus your expenses should be zero. You don’t win if you have an excess of income and vice versa, you don’t lose if you have a deficit. If you have an excess of income, you need to allocate that income to either savings or to your expenses. On the other hand if you end-up with a negative number, you need to either cutback on your expenses or increase your income.
When you have expenses that you pay either quarterly or yearly, you need to account for them on your monthly budget. Do this by dividing the quarterly amount by four to get your monthly expense. For yearly expenses, divide it by twelve.
Christmas, birthdays, anniversaries, etc. are not unexpected events. They come around once a year, so plan for them. Include a monthly amount in your budget for these items. The same goes for your children’s school or extracurricular activities, such as sports fees, uniform fees, school pictures, or yearbooks. They happen and should not be a surprise. These are an example of yearly expenses, which you include in your monthly budget by dividing the total yearly expense by twelve. You are in essence using the sinking fund approach for these expenses.
You do not need to open a bunch of savings accounts for each item. One savings account will suffice. Remember, however, to always keep track of what you have saved for each item. You can track it on a spreadsheet or by hand. The key is to track it.