It’s payday again. You sit down to do your online banking, with the hopes you’ll have enough left over to buy that “thingy” you’ve been wanting to buy for some time now. As you move towards getting all the utilities paid, your hope begins to fade. You aren’t even halfway through yet, and you already know that all familiar feeling. You are already broke!
Some of us, if we are lucky, are able to have enough to pay the grocery bill as well, but for others, we are forced to rely on the credit cards once again just to put some food on the table.
It’s a horrible feeling, and it often leaves many asking, where did my money go? In this article, I want to share a simple exercise that can help you understand exactly where all of your hard-earned dollars are going.
Know The State Of Your Flocks
Before we get to the exercise itself, let me ask you a question. Do you, without looking, know exactly how much money is in your checking account right now? How about your savings account? Your utility bill amounts? The point is, most people don’t have a clue without logging into the mobile banking app.
The Bible tells us in Proverbs 27:23-24 to “Know the state of your flocks, and put your heart into caring for your herds, for riches don’t last forever, and the crown might not be secure for the next generation.”
As God’s stewards, we have an obligation to manage our households well. We should always be looking ahead, and planning appropriately, rather than wondering where all of our money went.
The Pre-Budget Reality Check
If you’ve never done a budget before, or if you have been ignoring the one you created 6 months ago, you likely are in a brain fog about what is happening with your money. The simple solution for this is to do
what I like to call the Pre-Budget Reality Check.
It’s a simple exercise where you write down every dollar that has passed through your hands in the past 30 days. This will help you identify your cash flow. For most of us who do online banking, it’s as simple as jumping online to download our latest monthly statement. If you don’t do online banking, it’s a quick trip to the bank.
However, we don’t just stop with the checking account. Make sure you grab statements from all of your credit cards and cash withdrawals as well. If you have receipts for your cash transactions, that will be helpful also. Remember, this exercise is for you. It will help you to understand what exactly is going on in your financial situation.
Grab a sheet of paper (yes, do it old school) and make some categories:
INCOME: This one is the easiest. Just take a look at all of your pay stubs for the past 30 days.
RENT/MORTGAGE: Another easy one, just jot down the amount.
CAR PAYMENT/TRANSPORTATION: Hopefully you don’t have a car payment. But the vast majority of people either make loan payments or lease payments. Write down the amount.
UTILITIES: Water, Sewer, Electric, Gas, Phone, Internet, Cable, etc.
ENTERTAINMENT: Hulu, Netflix, Spotify, ESPN+, Disney+, etc.
INSURANCE: Home, Auto, Life, Health, etc.
TITHES/GIVING: How much did you contribute to God’s storehouse the past month?
FOOD: Make sure to include grocery store runs, fast food, pizza deliveries, Starbucks stops and convenience store trips.
GAS: Well, we all know the agony of this category right now. Now to see how bad it really is!
MISC: This is where you throw anything else that you spent money on the past 30 days.
Make sure you don’t “forget” anything. Don’t leave anything out. It is crucial for you to see where all of your hard-earned money is going so that you can put together a plan to keep you out of the nightmare of wondering where all of your money went and the trap of living paycheck to paycheck.
Tally It All Up – Don’t Panic!
Once you have written down every dollar that has passed through your hands the past 30 days, it’s time to grab a calculator and tally up each category you have listed. Take a deep breath.
If you have never taken a detailed look back at your spending before, you will most likely be shocked at what you discover.
The final step in this exercise is to take your income minus all of your expenses. The number you get is your cash flow for the month. If the number is negative, you are spending more than you make! It’s time to
turn it around and make some adjustments.
If you would like, I have a free PDF you can download and print off to make it easy to put all of your totals on. Having a nice, clean, visual sheet you can reference will help you in many ways. It’s great to look back once you are working towards financial freedom and see just how far long you’ve come!
—>Click here if you would like to download our Free PDF <—
Final Thoughts
Even if you have been budgeting for years, this is still a great exercise to see where you stand. While it’s a good idea to look back on the past 30 days, I often have my clients look back at the last 60 or even 90
days as well. Because that gives you a much better picture of what’s actually happening with your cash flow.
One of the great things about doing this, is it makes putting the budget together a lot easier. Because you already have all the numbers, and it’s about transferring them to your battle plan. Then you can make tweaks as needed to get your situation turned around!
Prayer: Heavenly Father, please forgive us when we don’t know the state of our flocks as well as we should. Help us to be more diligent in tracking our spending, so that we can make the best use of the resources You have entrusted to us. Thank you for opening our eyes and help us to make adjustments as needed along the way. In Jesus’ name, we pray, amen.
If you completed this exercise, what did you discover? Were you pleasantly surprised or completely shocked? Let me know down in the comment section below.
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