Budgeting Training for Residents

The purpose of budgeting is to:

• Provide a forecast of revenues and expenditures and construct a model of how our business might perform financially if certain strategies, events and plans are carried out.
• Enable the actual financial operation of the business to be measured against the forecast.
• Establish the cost constraint for a project, program, or operation.

Personal Budgeting

In tracking your money, you found out what you have now and what you can reasonably expect to earn. In tracking your spending, you found out what your typical pattern of spending is. This information is critical to developing a practical personal budget.

However, before you tackle personal budgeting, look at some of the reasons why personal budgeting often fails.

• Failure to prioritize expenses.
• Failure to budget practically for normal out-of-pocket expenses like groceries and gas.
• Failure to plan for the unexpected.
• Failure to include quarterly or annual expenses.
• Spending more money than you pocket.

Listing Expenses

Start personal budgeting by first listing and then prioritizing your expenses. Although most expenses are monthly or weekly, some expenses are annual, semi-annual, quarterly, or just plain unexpected. In addition, some expenses are discretionary. Discretionary expenses are part of your normal out-of-pocket expenses - the things you typically buy that you could live without, but chances are you won't. Failure to budget for discretionary expenses is one of the top budget busters.

• The Unexpected
  • Home repair & maintenance
  • Medical bills (Doctor, Dental, Eye Care, Chiropractic, Prescription Drugs)
  • Vehicle Repairs and Maintenance
• Annual, Semi-Annual, Quarterly
  • Homeowner's Association fees
  • Licence renewals (drivers, vehicles)
  • Professional fees (accountants, attorneys, tax preparation)
  • Property taxes
  • Insurance (life, home, health, auto)
  • Water bills
• Monthly
  • Child support payments
  • Credit card payments
  • Household rent or mortgage payments
  • Internet connection
  • Telephone
  • Television Cable/ Satellite Connections
  • Utilities
  • Vehicle leases or payments
• Weekly
  • Child Day Care
  • Groceries
  • Personal Care (clothing, bath & beauty, toiletries)
  • Transportation (bus, gasoline)
  • Savings
• Discretionary Expenses
  • Books, magazines, entertainment, impulse purchases, snacks, dining, vacation & travel, membership fees

Prioritising Expenses

Top priorities on any expense list are food and housing. Next in line are essential utilities like heat, electricity, and water service. Car loans or lease payments and car licensing fees are essential to your budget if your vehicle is essential to your job. Home insurance (if not a part of your mortgage payment), or renter's property insurance and vehicle insurances  should also hold a place on your list of priorities. Along with discretionary expenses, low priority expenses include unsecured loans, and credit card payments. Make sure your personal budget takes care of essential expenses and then consider the rest.

Practical Personal Budgeting

You may have calculated this when you tracked your money, but if you didn't your net income is the money you take home each month. (If you're paid weekly, multiply your weekly take home pay times 13 and divide by three to calculate your average monthly income.) List your expenses by priority. List the total amount of each expense and the date it is due. If these expenses aren't due this month, add these funds to savings. Use data from tracking your spending to determine your discretionary expenses. Include a monthly figure for the unexpected. If possible, find receipts, total them, and divide them to determine what is practical to expect from the unexpected. If you're not saving regularly, do budget money for saving. Having a money reserve (savings) to fall back on in an emergency can make or break your budget.

Making your personal budget work

When you begin personal budgeting, it's not uncommon to find your expenses total more than your income. Always take care of top priorities first. Then work on making practical decisions for the rest of your expenses. If you don't have enough money to take care of the priorities. If an expense isn't a priority, roll it into next month's budget. However, if you can't pay a bill or meet a minimum payment, do contact your creditor and let them know. Tell your creditor when you will be able to pay the bill, they'll usually be willing to work with you. Look over discretionary expenses and see what you realistically are willing to sacrifice to make your budget balance.  

The Envelope System

Keep a few envelopes in your room. Label each envelope as a spending category (e.g., entertainment, grocery shopping and eating out, clothing). Put a set amount of money from every paycheck in each envelope. Try to be as realistic as possible. Do not spend any more in that category when the envelope is empty; you’re done  ‍

Set up different accounts

This pseudo-budgeting system is fairly straightforward: Open a checking account that’s just for paying bills, a checking account that’s for living expenses, a savings account that’s a nest egg. Then divide up your paycheck each month into the various accounts. If you’d rather not set up separate checking or savings accounts, ING Direct gives you the ability to easily set up sub savings accounts within your main account.

Reward Yourself

A reward can be something as simple as eating out every Friday evening or treating yourself to a vacation once a year.  

Resources and Courses

CAP Money Course

CAP Money is a money management course that teaches people budgeting skills and a simple, cash-based system. This course will help anyone to get more in control of their finances, so they can save, give and prevent debt. CAP Money is a course devised by the award winning debt counselling charity, Christians Against Poverty.

CAP Money is run in thousands of locations throughout the UK by churches that partner with Christians Against Poverty. The course you sign up for will usually run over three consecutive weeks, primarily in the evenings, but some are run during the day. Some courses are run from the church building and others in cafes or similar. The number of people attending can range from five to 60.

The Money Course

The Money Course is a relaxed, fun, interactive, and very accessible four-session course which will help think through wider issues of money management, teach you how to build a budget and explore biblical perspectives on the matter.

Stewardship Online Resources

Stewardship provides training and resources to help churches develop a biblical perspective on money matters. You can collect key resources at each step below. It will be helpful to register first.

Budgeting & Debt Counselling

Residents often struggle financially; and where families are affected, it can be very challenging to navigate the minefield of benefits, especially for broken people. Please investigate free school meals for children, grants for uniforms and subsidised holidays for families. Useful resources include:  

1. Christians Against Poverty (CAP) – debt advice
2. Free phones financial advice - www.debtadvisorycentre.co.uk

Emergency Debt Counselling

Christians Against Poverty (CAP) also run a service specifically for people who are burdened with unmanageable debt. A CAP worker will visit your resident at home and run through with them their plan for getting them out of debt. CAP have a great record with helping people out of debt. They have good relationships with most of the major credit suppliers and are able to negotiate repayment conditions. They will come up with a plan to get your resident out of debt and in some cases help them with the practicalities like paying back their bills.  

Go to the CAP Website to see if there is a centre in your area and then call 0800 328 0006 free to book a home visit.