Some people love budgets. They enjoy categorising their finances and putting every dollar to work. And, indeed, there is value to this. Most financial experts wouldn’t suggest keeping a budget if they didn’t think it would help. The problem is that many people struggle to budget even though they accept it is an excellent thing to do. Perhaps there are several reasons why this is the case. For me, it usually comes down to perfectionism and boredom. When I write out a budget, I expect everything to go as planned. However, when my budget fails, I get frustrated with it and my lack of self-control. Also, the last thing I want to be doing is spending my time looking at figures on a page or computer screen. Some people thrive at budgeting but I don’t. That said, I see value in planning and having a good dose of reality. I don’t like budgeting, but at the same time, I don’t see any point in burying my head in the sand. So, is there a middle ground that can help the rest of us who don’t enjoy budgeting have some grip on our finances? Is there a way, especially when you are on a low income, to plan so that you avoid being caught off guard by various expenses and find a bit of financial margin? I believe there is, but it involves two essential habits. The first is the habit of forecasting your expenses and bills monthly. The other is to save. Forecasting your bills and expenses is slightly different from the typical budgeting approach. Most budgeting approaches involve allocating funds ahead of time to various categories.
In contrast, forecasting bills and expenses are about getting a sense of what might be coming your way. An excellent way to practice forecasting is to write out what bills and expenses you are likely to expect each month, including their due dates. It doesn’t need to be perfect as it is just a general guide. Of course, some bills and expenses will be regular, but that is ok. Writing out your bills and regular expenses reminds you to pay them. The good thing about this approach is that it usually just takes a few minutes but at the same time gives you some idea of what to expect. That, in turn, allows you to pray about those upcoming bills and expenses and prioritise them. Over time, you begin to develop a larger picture of your financial situation and naturally plan better while looking for ways to cut back.
When I think about financial forecasting, I remember what Proverbs says about ants. Specifically, Proverbs 6:6-8 says, “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 in the harvest”. Similarly, Proverbs 30:25 says, “Ants are creatures of little strength, yet they store up their food in the summer”. Ants are self-motivated. Ants also have a good grasp of reality and accept it. They know that winter is coming and prepare for it. Proverbs also remind us, “A prudent man sees danger and takes refuge, but the simple keep going and suffer for it”. The prudent man has a clear understanding of what is ahead and therefore has a greater chance of doing something about it. Financial forecasting helps by letting us know what is coming at us and allows us to better prepare for it.
The other essential habit is saving. Even if you are on a low income, saving is a habit worth developing. Again, some people find saving money more straightforward than others. However, anyone can grow in their ability to save. One of the reasons some struggle is they attempt to save too much too fast. They put aside a good portion of their income only to find that they have to dip into it when their other funds run out. The issue with continually dipping into savings is that it creates psychological permission to do it repeatedly, preventing you from forming the savings habit. In my mid-twenties, I read, “Dishonest money dwindles away, but he who gathers money little by little makes it grow” from Proverbs 13:11. At the time, I was undertaking studies and couldn’t save significantly. However, after reading that passage, I realised that a small amount put aside regularly begins to add up and helps to form a savings habit. So, I began to put an embarrassingly small amount aside each week. As the habit set, I found I could increase the amount without dipping back into my savings. And guess what, little by little, that amount began to grow, and so did my peace of mind. So, even on a low income, put some money away regularly. Make it small enough so that you won’t miss it. Focus on consistency. In time your savings habit will develop and provide you with greater discipline. It will also provide you with greater confidence in your financial situation.
When you are on a low income, don’t turn a blind eye to your financial situation. Instead, accept reality, get a good sense of what bills and expenses are coming up, and get into the habit of saving by regularly putting aside a little bit of your income. In time, you will be better able to plan for upcoming expenses and develop further peace of mind as you see your wealth increase little by little.
