How is it some people seem to always do okay with money and other people seem to always struggle with money?
Well for one thing, some people have learned and use simple “rules of thumb” to manage their money. The 10-10-80 Budget Plan that I talked about Sunday (3/11/2013) is one of those rules of thumb.
The 10-10-80 Budget Plan is one way to help you give generously as you want to, be sure you don’t get caught by emergencies, plus you have the money you need for expenses, and the money you want for some extras.
I know some are intimidated by just the thought of a budget. But a budget is just a tool to help you plan ahead, to help you save for anticipated expenses, be prepared for unanticipated (but inevitable) emergencies, and live within your means. You can download a simple budget worksheet here. Download other free financial planning tools here.
Here’s how the 10-10-80 Budget Plan works out.
1st 10%, pay God…
The first 10 percent of your income goes to God, since it is all God’s money and you are His money manager. So set aside what you plan to give as God has blessed you, give it with joy as an act of worship and an investment in advancing the work of the Kingdom of God!
2 Corinthians 9:27 – “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”
2nd 10%, pay yourself…
This is where you set aside the second 10 percent of your income to establish three savings accounts. The first savings account is your Emergency Fund. That savings account is at least three months living expenses to give you a cushion when the unexpected happens.
Proverbs 6:6-8 – Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.
The second savings account is planning ahead for the expenses you know about, they are going to happen: insurances, car repairs, health care co-pays, vacation, cash the next car (to avoid having to take out a loan to buy a depreciating asset), weddings, school, etc.
The third savings account is retirement. A little saved early and consistently adds up over time. You’ll be glad you did.
3rd 10%, pay everything else…
This is where you take care of the remaining 80% and pay your other bills: taxes, rent/mortgage, utilities, food, gas, clothes, tuition, entertainment, etc. What do you do if you can’t live on the 80 percent (while giving the first 10% and saving the second 10%)? That’s when you have to take a hard look at your standard of living. You have two choices, simplify your lifestyle—a less expensive apartment or house, eliminate the cable bill, eat out less often, do your own nails, etc.—or get a second job.
Luke 10:25 – Then give back to Caesar what is Caesar’s, and to God what is God’s.
Is the 10-10-80 plan the only way to do it? No. There are lots of good budget plans out there. But 10-10-80 is a good place to begin to learn the three key financial disciplines of planning, giving and saving.
Resting in Him,