This blog is the combined effort of four senior pastors of different churches. Their desire is to point you toward living a God-centered, gospel-focused, Christian life.

Monday, March 25, 2013

Planning and Tracking a Budget

We had a great time over the weekend discussing some principles of stewardship. In several sessions, we talked about budgeting. Below, I've listed some of the steps involved in planning and tracking a budget and provided some sample illustrations.

Is budgeting a biblical principle? I would hesitate to say that failure to budget is a sin. Instead, it seems better to say that budgeting helps me be faithful. When one has been entrusted with as many earthly resources as we have, it is hard for me to imagine how one can be faithful as a steward without budgeting.

In Luke 16:10-12, Jesus instructs us, “One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much. If then you have not been faithful in the unrighteous wealth, who will entrust to you the true riches? And if you have not been faithful in that which is another’s, who will give you that which is your own?”

For those who are interested, here are the steps I laid out regarding budgeting. One does not necessarily need to follow them sequentially. I’ll try to supply a few examples for some of these steps.

Step 1: Pray

Step 2: Ponder

In this step, we ask ourselves questions such as: What are the biblical principles concerning money? Where am I doing well? Where do I need to improve?

Step 3: Preview

In this step, we ask questions about the future, humbly recognizing that only God knows the future with certainty: What does the year hold (weekly, monthly, yearly expenses)? What are our goals for the year? For five years? For twenty-five years? What are our long-term needs? Where did we fail in the past year?

Example: Here’s a list of some of the things we’ve listed when compiling a list like this (not necessarily in order of importance!):

Building Fund
Life Insurance
Piano Lessons
Water Bill
House repair
Five Points
Date Night
Car Savings
Car Repair
Car Insurance

Step 4: Priorities

That's quite an aggressive list! Obviously, not all of those things will be able to be funded to the degree I might find ideal. In this step, we ask these questions: What are the most important things to spend money on in light of step 3? How will we implement biblical principles?

Example: I laid out a (long) list of things that my family needs/wants to be spending on or saving money for. As I look through the list, I realize my finances are inadequate to meet all of these goals.

I prioritize the list according to Biblical principles. Tithe, mortgage, food, clothing, and insurance are at the top of the list. The big-screen t.v. falls to the bottom of the list. 

Remember this: budgeting isn't just about asking if this is something you can afford. Often, I can afford something that simply isn't the best use of God's money.  

Step 5: Plan

Now we begin the planning stage. Based on when you are paid, determine what you need to save from each paycheck for all the expenses you laid out. Keep your own money whenever you can. Seek the counsel of others

Example: I get paid twice a month. For simplicity’s sake, let’s pretend that my take home pay is $1,100 per paycheck. I take all of the things on my above list and determine how much I will need to save for each item. Imagine my car insurance is $600 a year. This means each paycheck, I put back $50.
Here’s a vastly shortened example of my pretend budget (the real one would be longer, in an excel spreadsheet, and therefore much cooler looking):

Tithe: $110
Missions: $50
Mortgage: $200
Utilities: $100
Etc., Etc.: $640

Step 6: Pursue

·         By God’s grace, pursue the plan you’ve put in place. Make sure there is a mechanism in place to track your plan and follow through with it. Be flexible and willing to change the plan as needed.

I think a key element of budgeting is putting a system in place to track how we’re doing on following our budget. Here’s a simplified example of what I do, based upon the budget example above.

Every paycheck, the money is placed in our bank account. So, in our example above, let’s pretend that the beginning balance of our account, on January 1, was $0. On January 15, I deposit $1,100. Now, the balance is $1,100. My bank account would simply say something like:

First Savings Bank, Daniel’s balance: $1000.

But that’s very deceptive. I’ve already divided that money and planned for it in my budget. How do I track it? Personally, I use an excel spreadsheet. I design it so that as I read across a row horizontally, I can see how much is in each category of my budget. 

Here’s a sample spreadsheet with an explanation below:

Let me walk through what’s taking place in the chart above. After I make that deposit on January 15, now my balance is $1,100. The spreadsheet, as you read across it horizontally, shows me where that money has been allotted.

On January 30, I make another deposit. Again, entering those amounts in the spreadsheet shows me how that money has been divided among the categories I had in my budget.

The tricky part is when the bills are paid. We take every expenditure and assign it a category in the spreadsheet. After paying the bills, I am able to track how closely the budget is tracking what I’m actually doing with my money.

I try not to make changes too quickly as I budget. In the chart, I notice that I have excess money in utilities and a negative number in missions. Overall, I have a surplus in my account, so I’m not worried yet. I track spending over the next few months to see what patterns develop. My car insurance category is going to look great…until the bill comes due!

So...that's what our family does to see how closely our spending and saving is matching what we budgeted. I'd be interested if anyone else has other resources that they'd be willing to share.

By His Grace,



  1. Over the years, we've simplified our spreadsheet to ease the administrative overhead that might otherwise discourage budgeting. The biggest improvement we made is to only "track" what we have easy control over. But we have a "master" tab on the spreadsheet with everything. We budget by month. So for example, we don't track water, power, fixed giving commitments, mortgage, car insurance, savings, etc. But the "master" tab includes everything, and adjustments are made yearly based on history (and these items have +/- 5% change year to year if that). The things we do track are clothing, gas (maybe fewer road trips), food (ramen noodles this week), eating out/date money, home maint./repairs, any "fun" category, etc.

    Each month gets a tab (copy and paste Dec. out), the first column is description, then planned, then actual. The actual is a SUM of the remaining columns out to the right so it's easy to plug the number in for each entry moving to the right. Using a single credit card (paid in full every month) makes data entry pretty quick. Just a few receipts need broken down.

  2. The biggest budgeting game-changer I've ever seen is It is free, and it automatically tracks all your purchases and transactions in each account, categorizes them, and shows you where you are in your monthly budget for each category. I tried using Excel, but since it required a couple hours of work each month to stay on top of it, I ended up cutting corners or just skipping months all together.

    Mint has also made discussing money with my wife much smoother. We can both go in whenever we want to see how we're doing, but we still sit down periodically to talk about it together.

    The site is somewhat customizable, but purists will probably still want to build their own budget in Excel. My advice on this is the same as on what translation of the Bible is best: The best one is the one you actually use.