How to Manage Your Money
BASICALLY there are three ways to manage money: (1) Spend it, (2) save it, or (3) give it away. Let us first discuss how to spend money wisely.
If the Great Recession has highlighted nothing else, it has shown the wisdom of living on a well-planned budget. What is a budget? Simply put, it is an estimate of how income will be used, whether by an individual, a family, a business, or a government.
A Family Project
How can you plan a budget? “All family members,” says the book Budgeting, by Denise Chambers, “should be included in drawing up the plan so that all have a commitment to the family budget.” Periodically, all should get together to see how their budget is working. Creating a successful budget can become a rewarding family project as each one finds ways to live within the family’s income.
To work out a budget, some people use a computer program. Others simply use a pencil and a sheet of paper, which they divide into two columns. One column is for income, and the other for expenditures. It is also important to include in the budget a monthly amount to cover once-a-year expenses, such as income tax and perhaps a vacation.
A time-tested method of budgeting is based on the use of envelopes or folders labeled “Food,” “Rent,” “Transportation,” “Electricity,” “Medical Bills,” and so forth. In the past, people put cash for those expenses in the envelopes each month. Now many feel it is safer and easier to deposit money in a bank account and withdraw it as needed.
Jonathan and Anne, who live in South Africa with their two daughters, often use the folder method of budgeting. “If your salary is deposited in a bank account,” says Jonathan, “it is just as important to be strict about how your money is divided. For example, if you run out of your monthly allowance for meat, then you should not take money set aside for savings to buy more meat.”
Jonathan used to run a business, but now he and his family have chosen to be volunteer workers and are involved in building places of worship. Because they treasure this life of giving, they need to live on a budget more than ever. The family regularly have discussions to see how their budget is working and to make needed adjustments.
The Greater Happiness
Studies show that giving of resources to others, including time and energy as well as some money, brings a greater happiness. To the extent your resources allow, it can be the best of the three options mentioned in the introduction.
Chris Farrell, in his book The New Frugality, says that savings are “a means of supporting spending.” He recommends: “One of the most valuable and sensible things you can do with your money is give it away.”* Farrell adds: “When you think about what matters most, it’s usually relationships, experiences, and the sense of making a difference, not money and possessions.”
Michael Wagner, an economist, seems to agree. In his book, Your Money, Day One, aimed at motivating youths to save, he states: “When you take it upon yourself to help those who are less fortunate, that kindness and generosity will come back to you in a variety of positive ways, but most rewarding is the feeling you will experience in your heart by helping your fellow man.”
The Bible acknowledges that giving results in happiness. As discussed earlier, the Bible contains sayings that can help you manage your resources wisely. Now, consider seven more of these wise sayings.
Money can be given away in the form of gifts or hospitality such as preparing meals for friends and family.