What Is Budgeting?
Answer: A budget is a plan for how to use your money. If you knew you would be receiving $10, for example, you might decide ahead of time to put aside $1 for church and $2 in your savings account in the bank.
You might also decide to put $4 in your jar to use in two weeks for a church camping trip. The final $3 you might decide to carry with you to spend on snacks.
That plan would be your budget. It’s a good idea to write down your budget so you always know how to divide your money. Start with at least three categories: tithe, savings, and spending money.
Then you can add others as your needs change. You could include one, like in the example above, for an upcoming church camping trip.
A budget is also a good way of tracking your spending. After you have spent the money, you can compare what you did to how you planned to spend it. That helps you plan better in the future.
Key verse: A prudent person foresees the danger ahead and takes precautions; the simpleton goes blindly on and suffers the consequences. (Proverbs 22:3)
Related verses: Proverbs 21:20; 22:3; 24:3
Related question: Why do people have so much money when they have to buy only a few things?
Note to parents: The best time for children to practice managing money is when they are young. And one of the best ways to give them practice is to give them an allowance. Help your child set up a budget that makes sense for him or her.
Why Do People Have To Budget Their Money?
Answer: People should budget their money so they will have enough for all the bills they must pay. Everyone has big bills that come due in the future. It is good to write them down as a reminder so you won’t be surprised when they come.
The budget tells you how much to set aside each week or month so that you will have the money to pay the bills when they come.
Every day brings opportunities to spend money- opportunities to buy something that you didn’t plan for. A budget helps you know whether or not you can afford it.
You don’t have to budget your money. You can just go and spend it. But if you do, you will probably run out of money too soon. Then you will not have enough for the things you need, and you will never get to spend your money on the things you really want. Everyone should have a plan for how to spend his or her money.
Key verse: The wise have wealth and luxury, but fools spend whatever they get. (Proverbs 21:20)
Related verses: Proverbs 22:3; 23:19-21
Related questions: Why don’t they just make everything cheaper, and people would be rich and happy? Why don’t they just make dollars worth more?
Note to parents: To illustrate the need for budgeting, sit down one evening with your child and list all the things he or she would like to have.
Then write down what each item would cost, total them, and compare this with how much he or she has to spend over the next month. The only way to keep from running out of money is to look at this list and plan!
Why Can’t Parents Afford A Lot Of Things?
Answer: Parents can’t afford to spend money on certain things because they have chosen to spend their money on other things. All people have bills to pay with a limited amount of money.
And all people have to make choices about how they will spend that money. When your parents say they can’t afford to buy something you want, it’s probably because it is not in their budget, not because they don’t have any money.
That may sound unfair, but it’s really wise planning. People should say no to some things so they can have enough for the things they need and want most.
If the thing you need is really important, ask your parents nicely if they will include it in their budget as soon as they can. If it’s something you just want badly, put it into your budget. Then you can start earning money and saving for it.
Key verse: Those who love pleasure become poor; wine and luxury are not the way to riches. (Proverbs 21:17)
Related verses: Galatians 5:22-23; Philippians 4:12
Related question: I want a volleyball net and I know my parents have the money, but they just say it’s too much money. What should I do?
Note to parents: If your child is old enough, show him or her your budget. Explain that this is what you must spend money on and that this is why you sometimes say, “We can’t afford that”-it’s another way of saying, “We need the money for other things” (food, clothes, an upcoming vacation or birthday party, a home repair, savings for college, and so on).