Living a life full of joy and peace requires that you have financial security. No, not rich, no not rich, but financially secure. Don’t get me wrong, I’m not saying that the path to joy and peace is through money, but you will never experience true joy and peace while in debt. These are principles I was taught at a young age.
I never got an allowance, but instead made a few bucks sitting on my dad’s lap while “we” drove the lawnmower. I was first taught to give back to God what He has blessed us with. Second, smart spending leads to a smart future. Then lastly, save as much as you can. Dave Ramsey, a well-known Christian financial expert, was and is my role model when it comes to budgeting money. One of the best statements he said was, “Know where his money is going before you spend it.” It was with this statement that I started my first budget, and it is with this statement that I will explain how to be financially secure at a young age.
No matter what your salary is, budgeting is absolutely necessary. If you don’t have a budget system, you will spend much more than you think you spend. Before you know it, you get Starbucks every other morning, a meal with friends once a week, a cool piece of clothing you’ve been eyeing lately, a snack and a 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’re distraught because you can’t save any money!
The first step when you don’t have a budget is to save every receipt for every purchase you make for a month. Spend like you normally would, splurge like you normally would, but save all receipts while you’re at it. At the end of the month, separate all your expenses by category and see where all your money went. He probably spent $75 on gas and $350 on fast food. Now that you know where all your money is going, you can remove fat from some areas and add volume to other areas. Gas, bills, food, and housing are essential (just don’t live beyond your means). So protect these areas of your budget. Make sure what you’re doing covers those essentials. From then on, you can be creative. If you like shopping for new clothes once a month or a drink from Starbucks once a week with your friends, put that in your budget. At the end of your budget, you need to make sure your spending and savings match your income.
The second step is to take the money you plan to spend out of the bank after each paycheck. Working on a nearly all-cash system will keep you from spending more than you want. Let’s say you withdraw $30 for clothing from your paycheck. After spending $30, guess what? You have no more money to spend on clothes. 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’ve spent all the money in that envelope, stop spending. This requires discipline.
These are the first two basic steps to financial security. If you can master these first two steps and stay disciplined while doing so, you will begin to see joy and peace in your life. Even if you have thousands of dollars in debt, these are the first two steps you need to complete if you ever want to get out of that debt. Know where your money is going before you spend it. Don’t spend money you don’t have.
