How to budget for the dangers of inflation

Dear Chuck,

We tried to live on a budget when we first got married but didn’t stick with it. Now that we have children and are feeling the pain of rising gasoline and groceries, etc, etc., we need to get disciplined with money! Can you help us?

Budgeting for Inflation

Dear Budgeting for Inflation,

We are all having to navigate the dangerous challenges to our finances caused by inflation. To help you get serious about your budget, I reached out to Steve Brooks at Dedicated Money Management. Steve is a dear friend who served on staff with CRU for 21 years and Crown for 27. He has been a trained budget coach for over 20 years, helping tens of thousands of people manage money from a biblical perspective. He answered a number of questions that will help you get on the right track.

Why don’t more people live on a budget?

Steve: I think there are three main reasons why people do not stay on their budgets:

• They have wrong money beliefs.
• They have poor money behaviors.
• They don’t have a simple budgeting tool.

I teach my clients that God is the Owner of all that they possess. They are stewards of His money and possessions. If they do not get this right, they will never become “good and faithful stewards” of God’s money and possessions. If I do not have a spending plan (budget), I am probably spending God’s money the way I want to spend it instead of the way He wants me to spend it.

What is the best way to get the right perspective on budgeting?

Steve: I ask my budget coaching clients two important questions:

1. How would you act if I hired you as my money manager/steward?         

• Would you spend my money any way that you wanted to?
• If you did, I would quickly remove you from your money managing responsibilities!
• Or would you ask me how I want you to manage my money?
• This is the appropriate thing for a money manager/steward to do.

2. Since God has hired you as His money manager/steward, how should you act?

• Should you spend God’s money any way that you want to?
• If you do, He might remove you from your money managing responsibilities. This is what happened to the shrewd and dishonest steward in Luke 16.
• Or should you ask God to show you how He wants you to manage His money?

This is the appropriate thing for a money manager/steward to do.

Do people need special skills to make this work? 

Steve: I want my clients to become “budgeters,” not “accountants.” The difference is that budgeters check the category balance throughout the month before making a purchase to make sure they have enough money set aside for that purchase.

What tools do you recommend?

Steve: Choose a budgeting tool that works best for you.

• Cash envelopes
• Paper and pencil
• An Excel spreadsheet
• A computer program (Quicken, QuickBooks, etc.).
• A budget app that can be accessed on a cell phone to check a category balance before making a purchase. Some examples are You Need a Budget (YNAB), the one I like best, Mint, Every Dollar, or Calendar Budget.

What about those who say they don’t make enough to budget?

Steve: If one is unable to live on a budget because income is too low, consider these options:

• Look at every spending category in the budget, and ask yourself:
• Can this category be eliminated or lowered? Is it a necessity?
• Sell stuff you no longer need or want. Use the income to fund short- or long-term savings goals. For example, if you sell an item for $500, you might consider funding your vacation with this money instead of setting aside that money monthly.
• As a last resort, you might consider starting a side business or working part-time to earn additional income. I have clients who have become Uber Eats drivers temporarily to fix holes in their budgets.

What are the behaviors needed to budget well?

Steve: This is a great question and an important one to make the budget work well!

1. Keep your budgeting tool updated.
2. Check it before making a purchase.
3. Accelerate debt repayments.
4. Be generous toward God’s work in the world.
5. Save for future expenses.
6. Invest part of your income.
7. Husbands and wives, make financial decisions together.
8. Refer to the Crown Money Map when making financial decisions.
9. Seek counsel from the Bible and Godly family and friends.
10. Be completely honest and trustworthy.
11. Teach/train others to be faithful stewards (multiplication principle).

What are the beliefs that you want your budget coaching clients to know and believe?

Steve: All of these are Biblical principles that I can summarize:

1. God is the Owner, and we are stewards of HIS possessions and money.
2. Debt is bondage and should be avoided.
3. We are to be givers (generous) rather than getters (consumers).
4. We are responsible to teach/train others to be faithful stewards.
5. We are to seek counsel from God and others when making financial decisions.
6. We are to save and invest our money to meet needs and to build God’s Kingdom.
7. We are to work hard for the Lord in our God-given areas of strengths and talents.
8. We are to be absolutely honest.

Thank you, Steve!

General Principle to Follow

Since overall inflation is estimated to be between 8–10%, I suggest you reduce all spending by the same amount to ensure you are keeping up. You also need to increase your emergency savings, as you are able, to ensure you can navigate any disruptions to your income should inflation hurt your job or career.

Hopefully these ideas will set you on a course to develop your budget, stick with it, and navigate the rapidly changing effects of inflation on your finances. If you want help creating and staying on a budget, reach out to Steve today, or contact Crown to enroll in our Budget Coaching Program.