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Building a budget that will take you places

Going on a trip requires planning. You choose a destination, create an itinerary, arrange for transportation and choose appropriate lodging. In much the same way, a budget is a plan to help you reach an equally important state — financial peace-of-mind.

A successful budget empowers you to live within your means while staying on top of expenses. It also gives you the tools to be forward thinking as you plan and provide for the future.

Here’s the most basic plan to develop your budget:

  1. Outline your income sources
    Include everything — income from jobs, scholarship payments, work-study programs and any other source of funds.
  2. Decide what to give
    Tithes and offerings are an important part of every believer’s life, and this spiritual discipline has a place in the budget.
  3. List your fixed expenses
    Record all your routine living expenses, such as rent, utility bills, auto insurance and loan payments. Don’t forget to add in groceries and gasoline.
  4. Estimate your variable expenses
    Account for expenses that don’t show up every month. This might include tuition payments and books, along with car maintenance, medical bills, clothing, gifts and travel.
  5. Make a category for savings
    This is more about planning than spending. Everyone needs to build an emergency fund and save toward long-term goals, such as retirement. You might also need to set aside money for a wedding, to purchase a home or prepare for a mission trip.

Once you have outlined your budget, you’ll want a day-to-day way to manage it. Many people use the widely available online tools, such as Mvelopes , Buxfer Yodlee or Mint . Your bank may also provide an application that works directly with your account. Find the one that works best for your lifestyle.

There will come a day that you’ll want to modify your budget. This often occurs when you achieve a financial goal, such as having a robust emergency fund, or you make a major change in life, such as graduating from seminary. With a system already in place, it is easy to add, delete or change a category.

Building and living on a budget now will help keep your finances organized. It will also help you learn good habits, which will go with you on all the financial journeys ahead in your life.

GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be an endorsement of any particular product or service. Individuals are encouraged to do their own research to find a service that best fits their personal needs.