Thursday, March 5, 2009

Financial Hope 3/2/09

Monday’s Financial Hope Class was spent on cash flow planning or to use a simpler term, budgeting.

The point of a budget is not to punish you but to insure that you are in charge of where your money goes.

A really simple but effective budget is Dave Ramsey’s zero based budget.

Here are the links to two forms from Dave Ramsey—

http://www.daveramsey.com/media/pdf/fpu_qbudget.pdf

http://www.daveramsey.com/media/pdf/fpu_monthly_cash_flow_plan_forms.pdf


The first link is to a quick budget plan you can work on when you are just starting out. The second link is to a more involved plan.

As an aside – Financial Peace University is a 13 week course that will change your life. If you ever have opportunity to go through the course take advantage of it. We are looking at running the course again at Grace Restoration Church in the near future.

Some keys to a zero based budget—

Income minus expenses each month should equal zero. That means that if you do your budget and have money left over give it a name somewhere. for example, you could put it in the savings or blow category or add it to your giving.

Budgeting is a process. It’s not something you do once and forget about. You will make mistakes. You may leave something out. That’s okay. Pick yourself up and keep going. Budgeting is a dynamic, ongoing process.

For yearly expenses, like Christmas, decide how much you want to spend and average it out each month. If you pay your car insurance quarterly the amount by three to come up with a monthly amount.

One tip when you are starting out is to save receipts and start writing down how much you are spending on things like groceries and entertainment. Keep track and see where your money is going. You may be surprised and a little shocked.

Lon Purvis also talked about how to do a yearly budget. It’s a great plan that can simplify the process for some folks. I’ll blog more details about it later.

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