Prior Planning Prevents Poor Performance

images (31)Living a life full of joy and peace requires that you are financially secure. No, not wealthy, no not rich, but financially secure. Don’t get me wrong, I am not saying that the way to joy and peace is money, but you will never experience true joy and peace while being in debt. These are principles that I was taught at a young age.

I was never given an allowance rather, I earned a few dollars by sitting on my father’s lap while “we” drove the lawn mower around. I was taught first, to give back to God what He has blessed us with. Second, wise spending leads to a wise future. Then lastly, save everything I can. Dave Ramsey, a well-known Christian financial expert, was and is my role model when it comes to budgeting money. One of the greatest statements he ever said was, “Know where your money is going before you ever spend it.” It was on this statement that I started my first budget, and it is on this statement that I will explain how to become financially secure at a young age.

No matter what your salary is, budgeting is absolutely necessary. If you have no budgeting system, then you will spend far more than what you think you do. Without realizing, you get Starbucks every other morning, a meal out with friends once a week, a cool piece of clothing that you have been eyeballing lately, a snack and soda at the gas station. Next thing you know, you’ve spent an extra $250 this month; you have no idea where it all went and you are dismayed at why you aren’t able to save any money!

The first step when you don’t have a budget is to save every receipt from every purchase you make over a month. Spend like you normally would, splurge like you normally would, but keep every receipt while doing it. At the end of the month, separate all your expenses by category and gawk at where your money all went. You probably spent $75 on gas and $350 on fast food. Now that you know where all your money is going, you can cut off the fat from some areas, and bulk up in other areas. Gas, bills, food, and housing are essentials (just don’t live outside of your means). So protect these areas of your budget. Make sure that what you are making is covering those essential items. From that point, you can get creative. If you enjoy buying a new outfit once a month, or a Starbucks drink once a week with your friends, write that into your budget. At the end of your budgeting, you have to make sure your expenses and savings match your income.

The second step is to get your money that you plan on spending out of the bank after each paycheck. Working on an almost all cash system will keep you from spending more than you want. Say you withdraw $30 for clothing from your paycheck. After spending $30, guess what? You have no more clothing money to spend from. Use envelopes or folders to organize your money by category. Have a different envelope for each category in your budget: “Tithe,” “Gas,” “Rent,” “Utilities,” “Entertainment,” etc. Then once you have spent all the money in that envelope, you stop spending. This requires discipline.

These are the first two basic steps to becoming financially secure. If you are able to master these first two steps and stay disciplined while doing so, you will start to see joy and peace in your life. Even if you have thousands of dollars of debt, these are the first two steps you must complete if you ever want to get out of that debt. Know where your money is going before you ever spend it. Don’t spend money you don’t have.

Save all your receipts and see where your money is going. Budgeting according to your spending habits and cut the fat. Use cash for your own accountability purposes and once your cash is gone, no more spending.