SMI Visitor's Blog       

Welcome to the SMI Visitor's Blog where you'll find selected excerpts from our Member's Blog, plus occasional posts created especially for our visitors.

For SMI Web Members, click here to go to the SMI Member Blog.

« Blog Home

The best financial tool of them all

Once a month, we invite a guest blogger to write our Personal Financial Friday post. Today we're pleased to introduce you to Craig Ford, founder of MoneyHelpForChristians.com, a site that promotes "a frugal, simple, debt-free, and generous lifestyle so Christians can faithfully maximize their resources by putting them at the disposal of God’s Kingdom."

Craig is also the author of the e-book, The Secret to a Successful Budget (more about that below).

One thing of particular interest about Craig is that he is a missionary, currently living in Papua New Guinea. So, we take you now to the Southwest Pacific and Craig Ford!

If you're a regular Sound Mind Investing reader, you probably are already aware of the four financial "levels":

• Level 1 – Get Debt-Free
• Level 2 – Save for Future Needs
• Level 3 – Invest Your Surplus
• Level 4 – Diversify for Safety

In some ways, each new level requires a new body of knowledge and set of skills. What you need to know to get out of debt is different than what you need to know to wisely invest your surplus.

But no matter where you are in your financial journey, there's one tool that can help you keep financially healthy. It's the best financial tool of them all.

Are you ready for this? I call it — a budget. Yep, some folks try to be more subtle and give it a different name, but I’m gonna call it like I see it: it's a budget.

But a budget doesn't have to be the same for everyone. Too often, books on budgeting focus on numbers, techniques, and math. But what's essential is finding something that works for you, whether it aligns with anyone else's budget technique or not.

It really doesn't matter whether your system is low-tech or high-tech. All that really matters is that you come up with a system that:

• helps you intentionally spend your hard-earned income;
• helps you make informed spending decisions;
• provides accountability for spending;
• serves as a concrete reflection of your true priorities; and
• helps you achieve your financial goals.

The goal of the budget is to help you spend less than you earn. If you have a money management system that accomplishes that, then it is an effective budget.

Because each person is different, I wrote a book on on budgeting (details below) that doesn't try to force everyone into a budgeting mold. Instead, I offer various ideas for systems that fit different personality types.

Whatever system you develop, here are three things to keep in mind as you get started on a budget:

1. Budgeting is a process, not an event. You won't wake up tomorrow with a highly effective budget. It takes time to get better.
2. There is no such thing as a failed budget. There are simply ample opportunities to improve! When you make a budgeting mistake, just make the necessary adjustments and keep on budgeting.
3. There is no such thing as a perfect budget. Make it your goal to have an effective budget, not a perfect budget.

So stop thinking about budgeting as drudgery and get out of your mind that it has to look a certain way. Instead, focus on the positives of having a workable plan.

I believe personal finance is really about managing life, not money, so on the cover of my book, I put a picture of my daughter and me on a beach at the Gold Coast of Australia (that's southeast of where we live in Papua New Guinea). This picture reminds me why I budget. It reminds me that budgeting is not about saying "No." It's about choosing when to say "Yes."

Budgeting isn't an end in itself. It is simply an effective tool to help you use money wisely and make the most of what has God entrusted to you — all along life's financial journey.

If you're interested in learning more about Craig's book, click here. Craig's offering a 30% discount (good through Nov. 12) for SMI readers. Just enter the coupon code “SMIblog” at checkout.

Craig also has an article in the current issue of the Sound Mind Investing newsletter: "Five Spiritually Unhealthy Motives for Building up Savings."

Next Friday: more ideas for making the most of what you have. Spend wisely — and have a great weekend!

Powered by Movable Type  |   Subscribe  |   Email Updates