Tag Archives: budgeting

Lessons in Money Management

My parents raised nine children on a single income, so careful money management was a priority.  I don’t recall them ever formally sharing money management lessons. Rather, they instilled good money management habits through their example and casual conversations.  One of the ways they taught us good money management skills was by a allowing my sisters to make some of our spending decisions at an early age. The lessons I learned include:

  1. Spending for one thing means less money for something else.  When I was about 13, my parents decided to give us each $20 per week allowance.  In 1972, $20 was a significant amount of money. In fact, it is equivalent to about $130 today.  The catch was that the money had to cover all of our discretionary spending.  We were free to pack lunches for school, but if we wanted to buy lunch, it came out of our allowance.  We were also responsible for buying our own clothes and paying for movie tickets and other recreation.  We learned to manage money and make hard decisions.  If I wanted a new pair of shoes, I might have to pack my lunch for a whole week.
  2. Shop the sales.  My mother was a master shopper.  She watched sales and clipped coupons.  I have seen her leave a department store with multiple shopping bags of clothes for which she paid less than $20 in total.  She loved to search the clearance racks for a blouse or sweater that everyone else had overlooked, and she loved the challenge of finding the perfect skirt or pair of slacks to go with it.  She would go to every clothing store in the mall in search of what she needed to ensure that she got the best bargain. Mom knew what month to shop for appliances or furniture, and she knew when the “white” sales (linens) would be going on.  She loved to shop the after-Christmas sales, and she often bought outfits in January which she would give to us the following Christmas. With four daughters born in a 4 ½ year span, she knew one of us would be able to wear the skirts and sweaters she bought.
  3. Buy quality and keep belongings until they wear out.  My mother believed it was worth spending a bit more to get better quality.  She bought traditional styles that would not go out of fashion, and she wore her clothes until they were worn out.  Similarly, Dad taught us to keep cars until the costs of repairs exceeded the car’s value.  He and Mom purchased a car when they married in 1955; my middle school principal purchased the car from them in 1974.  They added a second car in 1965, as I was starting first grade.  I drove that car until my junior year of college, when I was rear ended while driving it.
  4. Save up for major purchases.  I don’t recall my parents ever taking out a loan to purchase a car.  Of course, a new car was a true rarity in our household.  I do recall, however, a couple of occasions when my father borrowed cash from his life insurance policy to cover a major purchase.  He explained that the interest rate was very low, and he was, in essence, paying it back to himself.
  5. Balance your checkbook regularly and know where your money is going.  Balancing the checkbook before we had computers could be a time-consuming activity.  My mother always sat at the kitchen table to balance the checkbook.   Canceled checks were returned to the payer in those days. Mom would tape the canceled checks to the check stubs in a large, three-ring binder.  She would mark them off on the bank statement and determine what checks she had written that had not cleared.  Mom balanced the checking account to the penny, and she was never satisfied until it balanced.
  6. Count the true cost of debt.  My parents bought their final home in 1971 for about $35,000.  The monthly payment of $238.  I believe the interest rate was 7 ¼%.  Mom marked off each payment on an amortization schedule. When there was sufficient money, she would make an extra principal payment or two.  I remember her explaining to me that when she paid extra money toward the principal, she was saving more than one payment, as the balance went down and less interest accrued from then on.  I also recall multiplying $238 by 360 payment and realizing that, if they made each payment as scheduled, the $35,000 house would cost them about $86,000.  This was an eye opener and provided an ideal opportunity for us to talk about homes as investments that would increase in value, whereas a car would lose value over time.  My mother paid off the house in about 13 years.  While my father appreciated not having a mortgage payment, he did fuss more than once over losing the tax deduction of the interest.
  7. Establish credit early and manage it well.  When I graduated from high school, my parents bought me a sewing machine.  Mom then declared that I needed a sewing cabinet, which I would have to buy myself. We went together to the Singer store and picked out a cabinet.  I believe the price was $125.  She instructed me to put $25 down and helped me apply for a credit card.  When the bill came, I paid off the balance in full.  At the age of eighteen, I had established some credit of my own.  I never used that credit card again, but it was the key to allowing me to get a Sears card a few years later.
Calculator, currency, and note pad.
Photo by Karolina Grabowska on Pexels.com

These money management principles have served me well. Steve and I have tried to instill them in our own children. I hope that they will help you to manage your money better and have less financial stress in your life.

For more money management tips and information on creating budgets, please check out my other blog posts under the Finance tab. For those desiring a better understanding of Biblical principles of money management, I have written a book Honoring God with Your Money. It is available on Amazon and from Barnes and Noble.

If you have money questions you would like me to answer, you may email me at susan.ball5@aol.com or write your question in the Comment section.   Those who email me will be signed up to receive my free quarterly newsletter with money management tips, encouraging stories, and Scripture inspirations. 

Honoring God with Your Money

My new book, Honoring God with Your Money, is now available on Amazon. This book is a study of what God’s word says about money, wealth, charity, greed, tithing, savings, and much more. It includes principles of budgeting and steps for getting out of debt.

Cover of Honoring God with Your Money, by Susan E Ball

If you are stressed by financial decisions or an inability to manage your money, this is a great book for you. God provides us all with resources to provide for our families and to bless others. Money is intended to meet your needs, not cause you more stress.

As you honor God by managing your money well, tithing, and blessing others, God will bless you. He has promised that in Malachi 3:10, “‘Bring all the tithes into the storehouse, That there may be food in My house, And try Me now in this,’ Says the Lord of hosts, ‘If I will not open for you the windows of heaven And pour out for you such blessing that there will not be room enough to receive it.‘”

This is a great book for small group studies and Sunday school classes, as well as for young people graduating from high school or college and going out on their own for the first time and newly-married couples. For those who want to teach this in a group setting, I have developed teaching materials. These include activities, discussion ideas, and examples to enhance the lessons. Teaching materials are free and can be obtained my emailing me at susan.ball5@aol.com

I pray that God will use this book to bless you as you honor Him.

Honoring God With Our Money: Steps to Budgets That Work

Steps to Budgets That Work

The information below is adapted from Larry Burkett’s book Family Budgets That Work.

1)      Include periodic debt (quarterly insurance premiums, annual HOA fees, etc) in your budget.  Set aside a fixed amount each month so that you have the money available when it’s time to pay these irregularly occurring bills.

2)      Set aside amounts to replace furniture, appliances, and fixtures that wear out over time and for replacing automobiles.  This can be included in your savings account, although you don’t want to dip into emergency savings for these items.

3)      Set aside money for family vacations and recreation.  If possible, budget 6% of your income for recreation and leisure.  If you don’t have room in your budget for a nice vacation, consider inexpensive options such as camping and stay-cations.

4)      Control impulse spending.  Make a ‘rule’ to wait at least 24 hours before buying items that you weren’t specifically shopping for.  Often the desire to purchase the item will go away once you have left the store.  If you decide you really want and/or need the item, purchase it only if (1) it fits into your budget and (2) you have the money to pay for it.

5)      Plan for gift-giving.  Set aside money each month for Christmas and birthday gifts.

6)      Watch miscellaneous spending.  Miscellaneous spending is a problem area for most families.  Track all of your cash spending for a month to determine what your problem areas are and then make a plan to deal with the problem areas.

7)      The bookkeeper should be the partner who is best at it, but spouses should work together to establish and maintain the budget.

8)      Develop a good system of keeping records.  Some people prefer the envelope method–put the budgeted amount of cash in an envelope at the beginning of the month and spend only the money in the env elope. Other people use Quickbooks, an Excel, or phone apps to track spending.

9)      Get out of debt.  Pay off debts with highest interest first, while making at least the minimum payment on all debts.  Once the highest-interest debt is paid off, apply that money to the next highest-interest debt, etc.

10)  Commit to using at least 50% of any “windfalls” to paying off debt.  The remainder of any windfalls should be used to meet shortages in other areas, including clothing and leisure.

11)  Set family goals. If your children are old enough, include them in your budget discussions. You will be starting them on the road to good financial management and they will better understand why you cannot always buy them the things they want.  Goals should include:

  1. Trust in God to supply your needs
  2. Save money regularly
  3. Family sharing time
  4. Husband and wife time
  5. Ministry to other people

Honoring God With Our Money: Creating a Budget

Financial Principles to Consider in Creating a Budget

The information below is adapted from Larry Burkett’s book Family Budgets That Work.

1)      Use a written plan.  A written plan helps keep you on track and provides a reference for you.  Adjust your budget as your income and/or expenses change.

2)      Provide for God’s work from the first part of your income.  God enables us to work and provide for our families.  All of our income truly belongs to God.  He asks for only a small portion of it back.

3)      Limit your use of credit.  Avoid using credit cards to purchase items you cannot afford.  Use credit only for large-ticket items that fit into your budget.

4)      Before buying new items, ask:

  1. Is it necessary?
  2. Is it the best buy?
  3. Is it an impulse purchase?

5)     Save regularly, even if it is only a small amount.  Setting aside even $10 or $20 per paycheck gets you in the habit of savings.  Increase savings as your budget allows until you can save 5% of your income.

6)      Set your own goals with your family.  No one else’s budget will work for you.  And your budget will not work for your family if one partner dictates the budget without input from the other spouse.  Work together as team.

7)      Get out of debt.  Develop a plan to pay off small debts first and continue until all debts are paid off.  We will look at strategies for paying off debt in two weeks.

8)    Avoid indulgences and lavishness in your family life.  However, do include  some money for leisure and recreation in your budget.  You will not be able to stick to your budget if you never feel rewarded for all your hard work.

9)     Seek good counsel if you have a question, preferably from a Christian financial counselor.  Crown Ministries (Crown.org) provides many resources to assist you in budgeting.

10)  Stick to your plans diligently.  Make a plan you can live with and follow it.

11)  Balance your checkbook every month or more often.

12)  Use duplicate checks if possible.

13)  Have only one bookkeeper in the family.  This should be whichever spouse is better at record keeping and balancing the budget.