This week’s COMPASS guest blogger is Beryl Jantzi. Beryl currently serves as Stewardship Education Director for Everence, a Christian-based, member-owned financial services organization which is a ministry of Mennonite Church USA and other churches. Prior to working for Everence, Beryl was a pastor in Pennsylvania and Virginia. He also previously served as moderator of the Virginia Mennonite Conference. He and his wife Margo Maust have two daughters who are students at Eastern Mennonite University.
This week Beryl will be sharing his perspectives about the importance of budgets. In the reflections that follow, Beryl poses a few questions related to the importance of budgeting, and ponders them particularly with young adults in mind. Today’s post is the first in a three post series in a question and answer format.
COMPASS: Why are budgets important?
Beryl: Budgets help us think about short and longer term needs and wants. Most things in life that are worthwhile require some kind of planning. Budget planning helps us become good stewards of what God places into our lives.
Budgets can provide guidelines for how we distribute not only our money but also other resources like time. When money is limited we need to become more creative in the recreation we do and how we extend hospitality – or how we use our gift of time.
Budgets help us discipline ourselves. If we tend to be a saver they help us with our giving. If we tend to be a spender, they help us find balance with our setting money aside into savings for the unexpected emergencies that can come along.
COMPASS: Starting a budget seems rather intimidating. What are some first steps to take?
Beryl: A lot of people don’t like the idea of budgets, in part because it requires thinking ahead and developing a plan. I have come across a helpful formula for personal finances. It’s the 10-10-80 plan. Looking at the three things we can do with money this plan encourages us to share 10%, save 10% and learn to live on the 80%.
Now on paper this doesn’t look too difficult. But in reality most people don’t pay much attention to sharing and saving. If this formula seems too demanding then you can always adjust it to meet your current situation while at the same time establish a more balanced financial plan. Maybe because of debt or limited resources we can only do 5-5-90 or 2-2-96, but that’s okay.
Figure out what your right formula is and stick to it for a year. Once this plan is in place, work to adjust the formula that will enhance the areas that are low. Move from a 2-2- 96 to a 3-3-94 and so on. The idea is to start with sharing, then go to saving and finally adjust your spending accordingly. Too often we spend without thinking about the other two areas which is where a lot of people then get into trouble.
Regular givers tend to be better money managers overall because once you determine in advance that you are going to give away 2% or 5% or 10%, you will automatically be more conscious of what you do with what remains. Give it a try!
The Everence website has a lot of resources on getting started http://www.everence.com/getting-started/ where you can get advice on credit cards, find calculators, and budget outlines http://www.everence.com/calculators/ to help bring some order to what can otherwise seem a chaotic time of life.
Wednesday, we will continue the conversation and consider implications about living the life you want on a budget while also facing and paying off debt.
This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.