Taxes, bills, loans—these are some of the common expenses that the average person finds to be sapping their finances. The amount of money you make would allow you to live comfortably if it weren’t for these few items, right? Since there is very little that can be done about the necessities, we are only left to work with what we have left over at the end of the day. I recently began looking over my budget and considering how I could grow my savings account and still manage to pay my bills every month. What inspired me to reconsider my budget was my tithe. If a person tithes 10% of his income every month, at the end of the year you can take about 10% of his annual income to figure out how much he has tithed. So if I had managed to tithe 10% of my income, why couldn’t I do the same thing with my savings account?
Pay Your Bills
One of the first things that you will need to do with your paycheck is to pay your bills. While this seems obvious, there are several ways to go about it. Let me share with you how I tackle mine. First, pay things such as the mortgage, car payment, or other bills that are somewhat more expensive. For me, every month I only pay the base amount for my mortgage payment. I am not putting any extra money towards it.
Secondly, take a look at your other bills. Things such as utilities and phone service will only be paid in the amount that you owe. However, you will want to strategically plan any payments made toward credit cards and loans. If you are trying to pay off several items, begin by putting extra money every month towards the higher interest item. You will be able to eliminate those payments sooner and will also keep yourself from having to pay the high interest. Basically, you will be making the minimum payments on the other items while you pay double or more on the high interest item. Once you eliminate that item from your bills, you can put that extra money towards the next high interest payment. You may also have loans that have a time limit on how long you get a low interest rate. These types of items are also good to try to pay off before the interest goes up.
Also, figure out the best timing for your payments. I like to pay for things about a week before it’s due instead of throwing all my money at all of my bills and going without much money until the next payday. If you go this route, be sure to keep money set aside that you need for upcoming bills. Planning your payments is very important for your budget. You need to look at how often you get paid to see which paychecks will cover which bills. Be sure to give yourself at least a few days allowance between when you get paid and when those particular bills are due.
I know that you need to put your tithe first, and this is in some ways almost considered a bill and should be factored into your budget. However, I do realize that there are some who are struggling financially and may not be able to give 10% every time you are paid. Just give what you can. But I will say that you will be blessed if you strive to always give 10% or more. The Lord has greatly provided for us, even when we were living with only Tim’s income. God has definitely provided for us time and time again. So once you have gotten the upcoming bills out of the way, make sure you write that tithe check before you do anything else.
Check Your Finances
There will always be those things that get in the way of putting money into savings. Look over your needs for that week/month. Are you having to set aside money for groceries, gas, or other such needs? Be sure to set aside money for the necessities.
Grow Your Savings
Once you have taken care of the above expenses, it’s time to see if you put money aside for savings. With everyone’s income being different, you may be adding one amount while someone else is able to add more or less. Do what you can. The goal is to add 10%. There are variables that can be shifted until you reach this goal. For instance, remember when I was talking about paying down debts? You may need to decrease the amount of money that is going out every month on these types of expenses. The best way to do this is to pay it off. The sooner you get these expenses paid off the better. Also, when you are checking over your finances, take a look at how much you are spending on groceries, gas, and unnecessary items. Is there some way you can cut your spending? Such as buying generic brands, buying less junk food, or limiting fun purchases to only special occasions. Do what you need to until you are able to put about 10% of your paycheck into your savings account each month. Let’s use $100 as an example. Let’s say that you are able to put $100 into your savings account each week. That would be roughly $400 per month. Or $5200 per year! By making the commitment to apply 10% to savings you can drastically increase the amount of money you save.
So why is saving money so important? There are the obvious answers such as vacation, retirement, and saving up enough money for college or a car. But if there’s anything I learned last year, it’s that you also need to have money set aside for those unexpected costs. Sometimes it’s a medical emergency and sometimes it’s a necessary repair on the house you just bought. Wherever you find yourself in life, be sure to set aside as much as you can and, hopefully, grow your savings.