Budgeting To Live Within Our Income

If we’re going to live the good life, it means we must budget in order to live within our income. A budget is simply planned spending, and people who don’t live by budgets usually experience financial disaster. Solomon, the wise son of King David, writes, “Plan carefully and you will have plenty; if you act too quickly, you will never have enough.” (Proverbs 21:5 GNB)


Financial freedom is not determined by how much we make, but by how much we spend. Living with our incomes requires the deferring of pleasure, or at least putting off having things until we can afford them. The world wants us to spend our money on what they want us to buy. They have no concern that if we do so we will have nothing left to share with God or others. Solomon writes, “The wise have wealth and luxury, but fools spend whatever they get.” (Proverbs 21:20) Spending everything we make is a sign of immaturity and can become an addiction, and breaking that addiction requires living by a budget.

People of all ages wonder about the correct way of creating a household budget. Dave Ramsey, author of The Total Money Makeover, shares five steps to creating a budget:

  • Step One - List Your Income. Income is any money you plan to receive during the month. On your budget, create separate income lines for every paycheck, bonus, and miscellaneous income you might receive.
  • Step Two - List Your Expenses. This is when you plan for the amount of money you plan to give or spend throughout the month. It may help you to create categories where you break down your expenses into items such as giving, saving, food, housing and utilities, transportation. Then, create line items under each category for every expense.
  • Step Three - Subtract Your Expenses From Your Income. When you are completely finished, your total should equal zero. This doesn’t mean that you should blow all of your money. Instead, it means that you give every dollar a purpose - spending, giving, saving, paying off debt, etc… If you subtract your expenses from your income and you’ve got money left over, put those extra dollars to work by applying them to your current financial goals. If you end up with a negative number, spend time cutting your expenses until your income minus your expenses equals zero. If this doesn’t work, do something to raise your income. Work overtime. Get a side job. Sell something. Do whatever it takes to make your balance number equal zero.
  • Step Four - Track Your Income and Expenses (All Month Long). Tracking your expenses means accounting for everything that comes in and out of your accounts throughout the month. Sometimes, this means making adjustments as you move along.
  • Step Five - Create a New Budget Before the Next Month Begins. While your budget shouldn’t change too much from month to month, the truth is that no two months are exactly the same. That’s why you create a new budget every single month before the month begins. You can start each month by copying over the previous month’s budget then making changes for anything that is different.

Today’s devotion has been more financially practical than most and has therefore been in a different form. However, those who live by a budget are usually happy to review the budgeting process while those who do not live by a budget really need the information. For further budgeting tips, see www.ramseysolutions.com


If you do not have a budget, use the information above to help you work up an initial budget for this month. If you need further guidance, see www.ramseysolutions.com. If you’re leading your family through this devotion, walk them through the budgeting steps once again and then allow every member, no matter how young, to practice budgeting using whatever income and expenses they might have. Then, have a discussion as to why budgeting matters.


Lord, thank You for Your blessings in my life. Please give me wisdom today to know how to budget from what You’ve given me. In the name of Jesus, Amen.

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