Sen$eworthy #4

by Pauline Blanton

After allocating at least 10% of our income to tithes and offerings, we can begin to apply some critical thinking to the remainder of our spending (including our savings component). For example, you already know how many dollars your rent or house payment is, but do you know if it’s a reasonable amount in light of your income? Do you think that since a landlord or lender agreed to allow you to rent or buy the home that it must be an acceptable amount for you to spend for housing? What you are allowed to do via loan approvals, etc., should not be your measuring stick as to whether it is truly within your means to afford whatever it is that you want.

On my cell phone there’s a feature called “Get it Now”. This is much of society’s motto in regard to most anything we want. Because of instant credit approvals and generous lending policies, we can often find a way to obtain whatever we decide we need – and just have “easy payments”!! In Galatians 6:7 it says “Do not be deceived… a man reaps what he sows.” If we sow a habit of buying whatever we want as long as we can qualify for the payments, we will reap a life that is never satisfied and perpetually in debt. Proverbs 22:7 says “the rich rule over the poor and the borrower becomes the lender’s slave.” But, if we will sow a habit of assessing our goals and needs, controlling our wants, and plan accordingly, we will reap the peace that comes from a contented life. I Timothy 6:6 says that “godliness with contentment is great gain”!

So how do we determine how much we can afford to spend for a home, car and other life necessities? We determine this by using category benchmarks. Perhaps you recall that in an earlier article I noted that budgeting is 80% behavior and 20% math. This is the math part. We need to allocate 100% of our income, beginning with the tithe. All other expenses (including savings) need to fit within the remaining dollars. Every household has different and unique needs, so there is not one right answer, but here are some sample benchmarks:

- Tithes and offerings – 10% +
- Housing Expenses    -- 40%
- (including insurance, taxes, utilities, phone, rent/payment etc)
- Transportation          -- 15%
- (payments, insurance, gas/oil, tags, repairs etc)
- Childcare (or tuition)-- 8%
- Debts                        -- 5%
- (student loans, credit cards, medical bills etc)
- Savings                    --   5-10%
- (to build emergency reserves, short and long term planning)
- Groceries                  --   10%
- Entertainment          --     5%
- (cable TV, Books, CD’s, Subscriptions, etc)

Add other categories as needed for your situation and adjust percentages to equal 100% when totaled. Prioritize so that all the basics are covered, and all income is fully allocated. Most likely as time passes, you will need to tweak and make adjustments until you have a realistic and livable budget.

To Do #4: Apply critical thinking to your monthly spending plan to see where your dollars are proportionately being spent. Identify where categories are too far outside of reasonable benchmarks and consider where reallocations could benefit you most both currently and in the future. Next time we will focus on how to make your dollars stretch even further!