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Creating a budget is simple and it is one of the first steps to taking control of your finances. If you’re not aware of what you’re spending or where the money is going, it’s easy to become a slave to money. Our goal is to become masters of our money so that we have a clearer headspace and a fuller bank account. Then, those funds can be invested in the Kingdom. Luckily, there is a budgeting system that you can use to build wealth, no matter what your income status.

1. Know Your Needs

The first step in creating a budget is knowing your needs. Make a list of what you spend money on each month (refer to old bank statements if you need them.) Include rent, utilities, gas, food, subscriptions, and miscellaneous purchases. Total that number and subtract it from your monthly income. That will give you an idea of how much extra you’re working with.

2. Apply the 80/20 Rule

The 80/20 rule means that you use 80% of your income each month to pay for expenses and 20% to tithe and invest. Here’s the real breakdown:

10%— Tithe:

There’s a reason this one’s first. It’s an act of surrender when we give God the first fruits of our income. It helps us get it into our heads that God is our provider, and he is worthy. Tithing, whether you give it to the church or donate it elsewhere, brings connection within the body of Christ. It really is a beautiful thing.

80%— Use for Necessary Expenses:

This includes rent, bills, loan and credit payments, food, gas, and whatever you must spend money on to survive. The beauty of this is that you can buy anything you want to, including junk if it falls into this percentage! That may not seem like a big deal, but it means that you’re not going into debt.

5%— Professionally Invest:

Put 5% into a Roth IRA, a mutual fund, or other paper assets. You can easily open a brokerage account with no fees upfront. Charles Schwab and Authentic Counsel are great options for this. They help you invest your money into assets and take a small percentage of the interest that’s accrued.

5%— Personally Invest:

You can get really creative with this one. I started teaching my grandson how to personally invest when he was eight years old. I pulled him aside and said, “Brayden, listen: Poppa is going to teach you how to invest.” So we went out on a Saturday morning and found a garage sale that had an old, broken-down, red wagon. It was rusted over and missing a wheel. That broken wagon was $2!

We took the wagon home, and I found some black and red paint in my garage. We bought a new wheel. I let Brayden do a lot of the sanding and the painting. When it looked like new again, we put a sign in the driveway and sold it for $20!

Sure, you may not want to put that amount of sweat equity into something, but the point is that my grandson learned how to invest. You can put that 5% into whatever you want, whether it be a business venture, renovating and reselling items, or learning how stocks work yourself. Personally investing is important when creating a budget because it’s the only way you’ll learn how to do it yourself!

**If you can, I recommend shooting for a 70/30 ratio. So, that’s living off of 70%, investing 20%, and tithing 10%. There’s no magic number, but you can save a little bit before you jump right into investing. I recommend right around the $500-$1000 range, but then it’s time to get into the game!**

3. Understand the Law of Leverage

If you’re going to build any significant wealth, you have to use the law of leverage. Essentially, this law entails using what little you have to create more. Archimedes once said, “Give me a lever long enough and a place to stand, and I can move the world.” Leverage is just that—using resources to move something bigger than you could move alone.

Take a look at the people around you. God brings people into your life for a reason. Leverage their time by learning all that you can from them. Or, take a look at how loans work. When you utilize those, you’re essentially leveraging other people’s capital to grow your own assets. You use student loans as leverage to gain the intangible asset of knowledge that you couldn’t gain on your own. You use mortgage loans as leverage to gain a house—good debt—that appreciates over time.

When you invest 10% (or 20%!) of your income, you learn to leverage capital by borrowing against assets that build in value over time. A key part of creating a budget is changing your money mindset. You must learn to value money for how it grows rather than just how it can serve your immediate needs.

If this post about creating a budget interested you, I recommend checking out WealthBuilders University. There are dozens of courses designed to help you along your wealth-building journey, whether you’re just getting started or are a seasoned investor.