This week the rubber met the road when it comes to personal finance. Up to this point, the course has focused mostly on expense tracking and spiritual principles like prayer, faith, fasting and tithing. We got our hands dirty with budgeting on Sunday. I’m a little short on time so I’ll quickly highlight concepts we discussed and considered.
Discussion Points
- Living a balanced life
- Simplifying our lives and eliminating unimportant things from our to do list
- Finish the sentence: “I just didn’t spend enough time__________.”
- Finish the sentence: “I spent too much time__________.”
- Good, Better, Best
- Budgeting to take control of our lives and protect our family
- Fixed vs Variable expenses
- Shopping for better insurance, phone plans, etc.
- Budget categories
- Delayed gratification
We ended up filling in a sample budget and “balancing it.” You mark your income and expenses and as you go down each line the balance decreases until it hits zero. It was quite easy to fill out having diligently tracked expenses the last month. Once that was all complete we took a personal survey and checked whether we thought we spent too little, too much, or are happy with our spending in each category.
Lazy Budget
In the end, I think tracking expenses is good and keeps us aware of where the money goes. It’s important to not get too separated from the pain of spending our money. One of the best budget templates we’ve used is found at MoneyPeach. Lately we have been moving more towards the lazy budget, meaning that we simply automate our finances to save and invest a certain percentage and live off the rest. Our savings rate on any given month is around 50%, but it’s difficult. There isn’t a lot of margin that we can cut, especially if anything unexpected comes up. This is why we are trying to increase our monthly/quarterly income through crowdfunded real estate to give us a bigger buffer.
Take Action
Take a moment to reflect on what you want your life to look like 25 years from now. Honestly answer the questions posed above. I’ll share my answers:
- I just didn’t spend enough time outside with my kids.
- I spent too much time listening to podcasts and reading articles.
Comment what you will regret spending too much or too little time on. Survey your expenses by category and take note of which are too high or too little, and make adjustments. Make a 1% gain. Decide today to change your financial future.
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