Personal Budgeting Principles: How Much is Enough?

To answer the crucial question, *“how much is enough?”*, we must begin by defining the boundaries around the money we use for personal consumption. This creates a clear structure, unlike an “open circle” mentality where any financial increase simply expands consumption without limit. A person with a *“closed circle”* mindset, on the other hand, approaches finances with purpose. When their income increases, they seek God’s direction on how to use it, rather than assuming it should be used to expand personal spending.

Open Circle vs Closed Circle
– Open Circle: Ever-increasing spending with no boundaries.
– Closed Circle: Fixed spending with clear boundaries.

What should this “circle” include? Obligations, necessities, and possibly even wants. But how do we balance this as Christians? Is it right to spend money on personal desires when others are in need? While God delights in providing for our desires, the key is to pray and seek His will before including wants in our budget. It’s about discerning the right timing and purpose, rather than acting like a child demanding more.

Creating a Budget: Defining Your Circle

To answer *“how much is enough?”*, you need to clearly identify your obligations, necessities, and wants. This process can be summed up in a budget. Although the word *“budget”* often evokes feelings of restriction, in reality, it’s a tool that helps you master your money and direct it with purpose.

Here are the steps to build a budget that honors God:

Step 1: Track Your Expenses

Get a “little black book” (or a tracking app) and record every expense for three months. No leakage! Write down everything, sorting it into categories like rent, groceries, entertainment, etc.

Step 2: Analyze Your Spending

At the end of each month, total your expenses by category. After three months, you’ll have a clear picture of where your money goes. This will help you identify the size of your circle and what changes might be needed.

Step 3: List Your Wants

Make a list of material wants. These are things beyond necessities and obligations that you desire but must be prayerfully considered before including in your circle.

Step 4: Close the Circle

Now that you’ve recorded past spending and defined your wants, it’s time to seek God’s guidance on each line item. Pray, asking God whether each expense is too high, too low, or just right. If you’re married, do this with your spouse to ensure unity. If not, seek accountability from a trusted friend. This process is a spiritual battle—expect resistance, but remember, when your financial house is in order, you create space for God’s overflow in your life.

Obligations, Necessities, and Wants

– Obligations: Fixed costs like rent, mortgage, or car payments. These are non-negotiable.
– Necessities: Items you need but can adjust. For example, you can spend less on groceries by changing where or what you buy.
– Wants: These should be added to the circle only after prayer and consideration. Break down larger purchases into monthly amounts, and only buy them when the funds are available.

Comparing Income and Expenses

Once you’ve created your budget, compare your income with your expenses. You will find yourself in one of three situations:
1. Income is less than expenses: Don’t be discouraged—trust God for an increase. With a closed circle, you’re in agreement with Him about your spending.
2. Income equals expenses: This is a good place to be, but God wants to take you further, to a place of overflow.
3. Income is more than expenses: Use this surplus for God’s purposes, not just for expanding personal consumption.

Reviewing and Adjusting Your Budget

Your financial circle will change as your life evolves. That’s why it’s essential to review your budget at least once a year or whenever there are significant life changes. Only you, with God’s help, can answer the question *“how much is enough?”* for each season of your life.

A Flow of Blessing

God’s heart is to get resources into your hands to bless others and advance His kingdom. Imagine a hosepipe—some are plugged and nothing flows through, while others leak because of an open circle of personal consumption. By closing the circle, you become a conduit for God’s blessing, ensuring money flows where it’s needed most.

Final Thoughts

The spirit of mammon will try to convince you that budgeting is too restrictive or too much work. However, a closed circle is liberating—it gives you clarity and control, allowing excess to be used for God’s kingdom. With a closed circle, you are the master, and money is your servant.