“Budgeting Basics,” Ensign, Mar. 1998, 72
As we set up our budget, one of our challenges was determining a figure for each item on our spreadsheet. This was because we each had differing views on how our income should be spent or saved. Budgeting required open and honest communication with one another to work out our differences. We quickly discovered that each of us had to stay within the parameters we had set or the budget was useless. Initially this seemed confining, but once we committed ourselves fully, we began to feel some of the freedom budgeting brings, including peace of mind. Budgeting helped us gain control over our money, eliminate impulse buying, and put aside money for future needs.
As part of our budget, we set up two savings accounts: our long-term and our short-term savings. Our long-term savings account consists of future reserves. Currently our goal is to have a six-month supply of money in the bank and to consistently save money for our children’s missions, education, and marriages.
Our short-term savings account is divided into such categories as insurance, taxes, car maintenance, home improvements, gifts and Christmas, clothing, and food storage. We budget a specific amount each pay period for each category, allowing the balances to build up over time. Then when we need money for one of those expenses, it is already there. Another benefit that comes from having the money set aside is that we can buy items such as gifts, clothing, and food storage when they are on sale without compromising our budget or turning to credit cards.
Our short-term savings plan also enables us to save for large purchases. Saving for these purchases assists us to buy without going into debt and incurring large interest charges.
My husband and I frequently feel the guidance of the Spirit in planning our budget and in working through our financial challenges. Besides being a vehicle to help us manage our money, budgeting together has strengthened our marriage and opened the door to many other unforeseen blessings.—Janice Stringham LeFevre, Kaysville, Utah