Budget Smudget, part one

I am secretly a Type-A personality (Noah's wasn't too happy when he found out).  As such, I truly enjoy creating our family's budget.  Brandon does not want to go near our budget with a ten-foot pole, so our situation works out well.  There are many ways to come up with a budget and many ways to follow-through with the budget.  Here are some of the ways our family sets it up and sticks with it:
1. Keep God at the center of all your budgeting decisions.  God has given you the money that you have and expects you to be a good steward of that money.  If you are confused about how much money should be spent on something, pray to God.  He will give you wisdom if you ask it of Him.  Also, ask for forgiveness for the times you fail to honor Him through your finances.  Proverbs 17:16 Of what use is money in the hand of a fool, since he has no desire to get wisdom? (NIV)  
2.Talk to your spouse about the budget.  Even though Brandon does not enjoy doing the budget, he still has to be aware of what is going on and approve of the budget.  Brandon is the head of our household, so if he does not have any clue where the money goes, then he cannot be an effective leader and will not be able to make wise purchasing decisions for his household.  Even if you do not run your household the way we do, communication is key when it comes to financial planning.  Otherwise, you might end up as one of those divorcee statistics.  Colossians 3:18-19 Wives, be subject to your husbands, as is fitting in the Lord.  Husbands, love your wives and do not be embittered against them. (NASB)    
3. Break it down.  Creating a record of what you spend and when you spend it can be time consuming, frustrating, and difficult.  Luckily, there are many tools on the Internet now that can spare you some of this labor.  I really like the budget tracker on Suze Orman's website.  I'm not a big proponent of Suze because she is such a hard-core feminist, but some of her advice is really right on and this budgeting tool is more extensive than something I could have thought up on my own.  I personally recommend taking this tool and using the information to create your own spreadsheet on excel so you have your budget handy at all times.  Proverbs 21:5 The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.
4. Be honest about what you spend.  This budgeting tool or any other tool you use to track your budget does you absolutely no good if you are honest with what you actually make and what you actually spend.  You may make $5,000 a month gross, but with all your deductions, you may only be making $3,000 net.  You might be able to fool yourself into thinking you are making more than you are, but the numbers will catch up to you eventually.  I also find one of the ways we become dishonest with our money is withdrawing cash from the ATM and then not tracking where that money goes.  Living on cash can be a really great system to a financially savvy future, but not if you don't document where that cash ends up.  Proverbs 13:7 There is one who pretends to be rich, but has nothing; another pretends to be poor but has great wealth.   
5. Have an emergency fund.  Do you live paycheck to paycheck?  Many of us do.  But what happens when your car breaks down, or when your kid breaks an arm?  Do you have enough in your savings account for those times when you just cannot foresee a place for them in your budget?  Moreover, what if you loose your job?  Do you have enough liquid cash piled away for when you need to job search and still pay your mortgage?  You must have an emergency fund of absolutely no less than 6 months of living expenses (Orman recommends at least 8 months).  This safety net is invaluable to keep you out of life-long debt or possible bankruptcy.  Speaking of which...

6. Flee from debt.  One of the biggest budget killers is debt.  Many people fool themselves into thinking that if they buy something on sale, they are getting a sale.  Not so if you put, for instance, a purchase on your credit card and are paying 16% interest on something that was 10% off.  Debt should be the exception and never the rule.  We Americans have this idea backwards for sure.  I am not saying there isn't a place for financing certain purchases.  There certainly is.  Mortgages, if you can truly afford one (taking in to account the down payment, closing cost, taxes, insurance, and utilities on top of monthly payments), can be a great tool to build and sustain wealth even in this topsy-turvy market.  However, I truly question peoples nonchalant attitudes toward car loans, student loans, credit card debt, etc..  Again, these financial tools have a place and can be good things, but I would personally recommend avoiding debt if at all possible.  This comes back to the idea of being honest with yourself.  Ask yourself, do you truly need the item you are going into debt for or do you just really want it?  Are you honoring God's calling in your life by using a loan as a way to accomplish this goal or are you lusting after an idol in your life?  Can you come up with a creative, non-traditional route to honor God's calling without going into debt?  These are all questions one needs to bring before the Lord before making these important financial decisions.  Proverbs 22:7  The rich rules over the poor, and the borrower becomes the lender's slave.         

I have much, much more to say about this topic.  But if you are looking for more immediacy to your unanswered questions, I would recommend Dave Ramsey's The Total Money Makeover: A Proven Plan for Financial Fitness.  I read this book a few years ago, and have really tried to honor his plan.  He is also a confessing Christian and is one of the few I have read who encourages a true honoring of God with the money God has given.