Living on a Budget: What is it? - Wix.com

Help and Hope for Your FinancesHelp and Hope for Your FinancesLiving on a Budget: What is it?Living on a Budget: What is it?

JosJoséé R. FigueroaR. FigueroaJanuary 9, 2011January 9, 2011

www.figueroafinancial.comwww.figueroafinancial.com

January 2011 2Help and Hope for Your Finances - www.figueroafinancial.com

ContentsContents

�� Lessons OutlineLessons Outline

�� Our StoryOur Story

�� Financial CompassFinancial Compass

�� Living on a BudgetLiving on a Budget

�� What is it?What is it?

�� How you do it?How you do it?

�� Prioritized SpendingPrioritized Spending

�� TipsTips


Lessons OutlineLessons Outline

�� Jan 9 Jan 9 -- Living on a Budget: What is it?Living on a Budget: What is it?

�� Jan 16 Jan 16 -- Growing Up: Learning to Save Growing Up: Learning to Save MoneyMoney

�� Jan 23 Jan 23 -- Out of Slavery: Life after DebtOut of Slavery: Life after Debt

�� Jan 30 Jan 30 -- Giving as a Lifestyle: Beyond the Giving as a Lifestyle: Beyond the TitheTithe


Our StoryOur Story�� 20 solid years of experience in the software 20 solid years of experience in the software

engineering and IT disciplines. Currently employed as engineering and IT disciplines. Currently employed as

a Program Manager with IBM.a Program Manager with IBM.

�� Completed Completed Dave RamseyDave Ramsey’’s Counselor Training s Counselor Training (April (April

20102010******).).

�� EducationEducation�� MS Software Engineering (UH Clear Lake 1997)MS Software Engineering (UH Clear Lake 1997)

�� BS Computer Engineering (UPR 1990)BS Computer Engineering (UPR 1990)

�� PersonalPersonal�� Serve as Sunday School Teacher, Deacon @HPBC.Serve as Sunday School Teacher, Deacon @HPBC.

�� Facilitated 5 FPU sessions @ HPBC with my wife Stacey.Facilitated 5 FPU sessions @ HPBC with my wife Stacey.

�� PassionPassion�� Teaching the Word of God (Teaching the Word of God (2 Timothy 2:152 Timothy 2:15) to help ) to help

believers grow as disciples of Jesus Christ.believers grow as disciples of Jesus Christ.

�� Help people to gain control of their finances.Help people to gain control of their finances.Family� Stacey

� Freelance Pianist� Involved in HPBC’s Music Ministry� Biology – University of Texas

� Brent (24)� Photography - Texas State

University� Graphic Designer @ Nehmedia,

Inc.

***Note: Completion of Dave Ramsey's Counselor Training does not create an employment or an agency relationship, or give any Counselor the right to speak for or bind Dave Ramsey or his company, the Lampo Group, Inc., nor does it constitute an endorsement or recommendation by Dave Ramsey.


Our StoryOur StoryWhere we were (Sep 2005)Where we were (Sep 2005)�� Had a very good, stable job, with great income. Had a very good, stable job, with great income. But...But...�� Were living paycheck to paycheck. Using credit cards to Were living paycheck to paycheck. Using credit cards to

make up the differencemake up the difference..�� Had almost Had almost $50K$50K in unsecured debt (car note, credit cards, in unsecured debt (car note, credit cards,

student loan, etc.).student loan, etc.).�� Had no plan to pay for college for our son.Had no plan to pay for college for our son.�� Had no savings for emergencies.Had no savings for emergencies.�� Had very little in retirement funding.Had very little in retirement funding.�� We were We were not workingnot working togethertogether as a couple.as a couple.�� We realized We realized we were not honoring Godwe were not honoring God in the handling of in the handling of

our finances. We also realized we needed help to learn how our finances. We also realized we needed help to learn how to do just that.to do just that.


Our StoryOur Story�� HPBC offered HPBC offered Dave Ramsey's Financial Peace Dave Ramsey's Financial Peace University (FPU) University (FPU) and I attended the 13 week and I attended the 13 week course.course.

�� Started learning and applying Started learning and applying biblical principlesbiblical principlesfor sound financial management.for sound financial management.

�� Began a Began a life transforminglife transforming journey for our family.journey for our family.

�� What I would share today with you is how we have What I would share today with you is how we have appliedapplied those principles to our lives.those principles to our lives.

“The law of the LORD is perfect, restoring the soul; The testimony of the LORD is sure, making wise the simple.”

Psalm 19:7 (NASB)


Our StoryOur StoryWhere We Are TodayWhere We Are Today�� We are We are living on a budgetliving on a budget. We have a . We have a planplan for our finances. We for our finances. We

have learned to have learned to live on lesslive on less than we make.than we make.�� We have paid off all of our unsecured debt (We have paid off all of our unsecured debt ($50K$50K). It took us ). It took us 29 29

monthsmonths..�� Sold our house, and as of Nov 1, 2010 Sold our house, and as of Nov 1, 2010 we are completely debt we are completely debt

freefree..�� We have a We have a 66 month emergency fund.month emergency fund.�� We were able to pay for our son's college We were able to pay for our son's college without borrowing without borrowing

moneymoney and without him borrowing money.and without him borrowing money.�� We have a We have a structured approachstructured approach for retirement savings.for retirement savings.�� We coordinated five FPU sessions at HPBC (2008We coordinated five FPU sessions at HPBC (2008--09).09).�� Completed Completed Dave RamseyDave Ramsey’’s Counselor Training s Counselor Training –– April 2010April 2010******�� We are honoring GodWe are honoring God with our handling of finances.with our handling of finances.

“Honor the LORD from your wealth and from the first of all your

produce;”Proverbs 3:9 (NASB)

***Note: Completion of Dave Ramsey's Counselor Training does not create an employment or an agency relationship, or give any Counselor the right to speak for or bind Dave Ramsey or his company, the Lampo Group, Inc., nor does it constitute an endorsement or recommendation by Dave Ramsey.


Contact InformationContact Information

Website: www.figueroafinancial.com

Facebook: www.facebook.com/figueroafinancial

Figueroa Financial Counseling


God’s OwnershipPsalm 24:1

Saving Money (Proverbs 21:20)

Kids

Living on Less than you Make(I Timothy 6:6-10)

Lack of Knowledge

Life after Debt(Proverbs 22:7)

Emotional Stress

Agreed On Purpose Cash Flow Plan(Luke 14:28-30)

Highly Effective Marketing of Credit

Giving(Luke 18:12)

Most Marketed Country in the World

Four Walls(I Timothy 5:8)

Stressful Communication Between Husband & Wife

Financial Compass

“The earth is the LORD'S, and all it contains, The world, and those who dwell in it.”

Psalm 24:1 (NASB)


Living on a Budget: What is it?Living on a Budget: What is it?Living on Less than you Make

“But godliness actually is a means of great gain when accompanied by contentment.”

I Timothy 6:6 (NASB)

Agreed On Purpose Cash Flow Plan(28) For which of you, intending to build a tower, does not sit down first and

count the cost, whether he has enough to finish it(29) lest, after he has laid the foundation, and is not able to finish, all who

see it begin to mock him,(30) saying, ‘This man began to build and was not able to finish.’?

Luke 14:28-30 (NKJV)

Four Walls“If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse

than an unbeliever.”I Timothy 5:8 (NIV)


Living on a Budget: What is it?Living on a Budget: What is it?

““A budget is people A budget is people telling telling their money what to dotheir money what to do, , instead of wondering instead of wondering where it wentwhere it went””..

John MaxwellJohn Maxwell


Living on a Budget: What is it?Living on a Budget: What is it?�� A written budget is simply a A written budget is simply a blueprintblueprint to help you to help you manage and control all of your finances.manage and control all of your finances.

�� A written budget gives you and your spouse a way to A written budget gives you and your spouse a way to objectively and comprehensively objectively and comprehensively discussdiscuss money money matters.matters.

�� A written budget will help you to A written budget will help you to live on lesslive on less than than you make.you make.

“The plans of the diligent lead surely to advantage, But everyone who is hasty comes surely to poverty.”

Proverbs 21:5 (NASB)


Living on a Budget: How do you do it?Living on a Budget: How do you do it?

�� Mechanics of setting up a budget are Mechanics of setting up a budget are simplesimple..

�� Do it Do it every month, before the month every month, before the month beginsbegins and and ““on paperon paper””�� Lay out Lay out allall of your monthly take home of your monthly take home income.income.

�� Lay out Lay out allall of your monthly expenses.of your monthly expenses.

�� Potential Tools to UsePotential Tools to Use�� Yellow note padYellow note pad�� QuickenQuicken�� ExcelExcel�� OtherOther


Living on a Budget: How do you do it?Living on a Budget: How do you do it?

�� Spend Spend everyevery single dollar single dollar ““on paperon paper”” and and ““on on purposepurpose””. Allocate . Allocate everyevery single dollar to a single dollar to a spending category.spending category.

�� This is whatThis is what’’s a called a s a called a ““zerozero--basedbased”” budget.budget.

“Be diligent to know the state of your flocks, And attend to your herds;”

Proverbs 27:23 (NKJV)


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A B C D E F G

Take Home Pay Expenses MTD$4,000.00 $0.00

Budgeted ItemPlanned

Spending

Planned

Percent of

Take Home

Pay

Actual

SpendingDelta

Actual

Percent of

Take Home

Pay

Recommended

Percent of

Take Home

Pay

Giving 0.00% 0.00% 10-15 %

Tithe 0.00 0.00% 0.00 0.00

Charity 1 0.00 0.00% 0.00 0.00

Charity 2 0.00 0.00% 0.00 0.00

Charity 3 0.00 0.00% 0.00 0.00

Totals 0.00 0.00 0.00

Savings 0.00% 0.00% 5-10 %

Emergency Fund 0.00 0.00% 0.00 0.00

College Fund 0.00 0.00% 0.00 0.00

Car Replacement Fund 0.00 0.00% 0.00 0.00

Furniture Fund 0.00 0.00% 0.00 0.00

Christmas Fund 0.00 0.00% 0.00 0.00

Vacation Fund 0.00 0.00% 0.00 0.00

Totals 0.00 0.00 0.00 0.00

Housing 0.00% 0.00% 25-35 %

1st Mortgage 0.00 0.00% 0.00 0.00

2nd Mortgage 0.00 0.00 0.00

Real State Taxes 0.00 0.00 0.00

Homeowners Ins 0.00 0.00 0.00

Repairs/Maintenance 0.00 0.00% 0.00 0.00

Housewares 0.00 0.00% 0.00 0.00

Storage Building 0.00 0.00% 0.00 0.00

Alarm System 0.00 0.00% 0.00 0.00

Other 0.00 0.00 0.00

Totals 0.00 0.00 0.00

Living on a Budget: Sample SpreadsheetLiving on a Budget: Sample Spreadsheet


Living on a Budget: Prioritized SpendingLiving on a Budget: Prioritized Spending

�� Focus on the Focus on the ““Four WallsFour Walls”” first (basic first (basic necessities)necessities)�� FoodFood

�� Shelter (Mortgage/Rent, Utilities)Shelter (Mortgage/Rent, Utilities)

�� TransportationTransportation

�� ClothingClothing

“But if anyone does not provide for his own, and especially for those of his household, he has

denied the faith and is worse than an unbeliever.”I Timothy 5:8 (NASB)


Living on a Budget: Prioritized SpendingLiving on a Budget: Prioritized Spending

�� Use your budget to Use your budget to gain insightgain insight as to which as to which areas can be adjusted/cut back (e.g., dining areas can be adjusted/cut back (e.g., dining out, entertainment, vacations).out, entertainment, vacations).

�� Prioritize Prioritize givinggiving (tithing, charitable giving).(tithing, charitable giving).�� Learn to Learn to pay yourself firstpay yourself first (savings, (savings, ““four four wallswalls””).).

�� Learn how to say Learn how to say ““nono”” to yourself. Focus on to yourself. Focus on needs, not wants.needs, not wants.

�� Use cash (Use cash (envelope systemenvelope system) to help you ) to help you manage and control spending on a few manage and control spending on a few categories (e.g., food, clothing).categories (e.g., food, clothing).


Living on a BudgetLiving on a Budget

“There is no dignity quite so impressive, and no

independence quite so important, as living within your

means.”Calvin Coolidge


Living on a Budget: TipsLiving on a Budget: Tips�� Pray. Trust GodPray. Trust God’’s s wisdomwisdom and trust His and trust His lovelove..

�� Keep it Keep it simplesimple..

�� Work with your spouse. If single, find an Work with your spouse. If single, find an accountability partner.accountability partner.

�� Do it every month. Do it every month. PlanPlan it and it and livelive it!it!

�� Keep up with your spending.Keep up with your spending.

�� Adjust as necessary.Adjust as necessary.

�� Stay with it!Stay with it!

“May he give you the desire of your heart and make all your plans succeed.”

Psalm 20:4 (NIV)


Conclusion: So What?Conclusion: So What?

“Make all you can, save all you can, give all you can.”

John Wesley


ReferencesReferences


ResourcesResources�� Dave RamseyDave Ramsey

�� Website: Website: http://http://www.daveramsey.comwww.daveramsey.com//�� BooksBooks

�� ““The Total Money MakeoverThe Total Money Makeover””�� ““Financial Peace RevisitedFinancial Peace Revisited””�� ““More Than EnoughMore Than Enough””

�� Quick Budget Tool:Quick Budget Tool:http://www.daveramsey.com/tools/budgethttp://www.daveramsey.com/tools/budget--lite/lite/

�� Recommended ReadingRecommended Reading�� ““The Richest Man in BabylonThe Richest Man in Babylon””, George S. Clason, George S. Clason�� ““Rich Dad, Poor DadRich Dad, Poor Dad””, Robert T. Kiyosaki, Robert T. Kiyosaki�� ““The Millionaire Next DoorThe Millionaire Next Door””, Thomas J. Stanley/William D. , Thomas J. Stanley/William D. DankoDanko

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Living on a Budget: What is it? - Wix.com