Money Tool Box / Budget Calculator
A budget is a basic tool for managing God's money. The budget calculator produces expected income and expenses that summarizes the budget. Budgets need goals for the budget period, often one year ahead. Otherwise, the budget is random numbers. And goals need plans showing steps to do the goals.
A budget is a spending plan. It’s the best estimate of time, talents, money and resources to do budget goals in the period. Budgets free, they don’t constrain you. Without a budget, you stumble along, and advertisements dictate spending.
The budget starts with goals, then costs plans to do them. It examines gaps and opportunities during the budget period to seize or overcome.
Budgeting is preparing the budget. We set goals and complete income and expenses forms before the period. After, we check how we are doing and change as needed. Budgeting is iterative and continuous. That's why we developed PEACE Budgetary Control.
Budgeting is the Planning and Estimating phase of PEACE; the counting the cost before acting stage that Jesus mentions in Luke 14:28. After doing the budget, Act—do what you planned, Compare results against the plan and the budget, and then, Execute needed changes. Doing the budget without the control part of PEACE—Act; Compare action with budget; and Execute changes is useless
For more on PEACE Budgetary Control, refer to The New Managing God's Money-The Basics chapters 8-10.
Complete the expenses calculator only after deciding the amount available to spend. To start, you won't know your spending pattern, so use your best estimates for items on the Budget Computation Expenses Form. What might be income and expenses? Tough question. Answer it with information available. Record spending over the next three to six months to learn your spending pattern; as needed, modify the budget (best estimates) on the spreadsheet file or on the expenses computation form. A spending fast will help during this challenging period.
As you prepare the budget, identify control units. Don't try to"manage" dollar amounts—money isn't manageable, it's the units behind money that's manageable—money drivers. Instead of $250 for clothing without identifying what's included, specify clothing items (units) you wish to buy, then cost each (price). Show the cost on the expenses form. Keep details of these calculations to help with your budget review—the "C" in PEACE. I repeat, the key control unit isn't dollars, but what's behind the dollars. For meals, decide how many times you will eat out monthly and use a cost for each; monitor the number of times you eat out and the budgeted prices. If you focus on dollars only, you won't deal with real control variables, which your behavior influences.
After you enter your expenses on the form, "Save Your Work," then click "Create Worksheet." The name of the file saved will be "expenses.mgm." You can open it only by clicking, "Restore Saved Work"—unlike other files, clicking on it won't open it. The worksheet form will give options to "Create Envelopes" for each category on the budget computation form, and save to "Spreadsheet File." More guidelines are on the worksheet form.
The Money May is a key budget worksheet—a budget segment you travel with, not a complete budget. For a full budget, go to the Incomes Form.
Ever wanted budget segments when shopping? For instance, when at the mall to buy budgeted clothes, birthday and Christmas gifts, and bulk toiletries? Or, on vacation and wish to stay on budget for transport, food, shelter, and recreation? The Money Map is the answer. It gives you a separate worksheet (map) with budget expense categories to help you stay on track. Don't leave home without it.
To activate the Money Map worksheet, enter values in the Budget Computation Expenses Form’s weekly section only. Ignore amounts for other periods. For the Money Map calculations only, don’t enter amounts in the Income Form. Going away for a week and plan to spend "gas" $100, "dining out" $350, "accommodation" $400, and "movies and shows" $50? Enter these amounts in the weekly section of the Expenses Form, then click "Create Money Map" for the "Money Map Worksheet" screen. There, amounts appear under "Weekly Budget“; change them as needed.
The Money Map Worksheet doesn’t replace the budget. It represents selected budget items you want to isolate and track over a period shorter than the budget period. It’s a trip map.
© 2002-2019 Michel A Bell. All Rights Reserved. This site is for information only.
Before you implement financial decisions, consult an Independent Financial Advisor. Scripture quotations, unless otherwise noted, are from the New International Version (NIV) of the Bible (Copyright © 1973, 1978, 1984 International Bible Society. Used by permission of Zondervan Bible Publishers. All rights reserved.)