Reflections on God and Money: Creating a Budget (9)

Unless the Lord builds the house, those who build it labour in vain. Unless the Lord watches over the city, the watchman stays awake in vain. It is in vain that you rise up early and go late to rest, eating the bread of anxious toil; for he [the Lord] gives to his beloved sleep.

Psalm 127:1-2

Here is a simple ‘model’ for banking that many people have found helpful – but be free to adapt it to meet your own needs. Have three accounts, as follows.

Account A. Your salary or other income is paid into this current account. Set up direct debits and standing orders to pay all your regular bills automatically – your rent or mortgage and your council or other housing tax; your water, electricity, gas and other utilities; your insurance and any important subscriptions.

Also set up a standing order to transfer some money – it need not be much! – into a savings account. This is a good habit to get into, so that you get used to doing without some money now to create a store for the future – like the farmer storing crops and other produce.

If you receive a regular income that is more-or-less the same amount each month, if you can afford to, set up a standing order to give to your church or a charity: again, this need not be a large amount but it helps establish a habit of selflessness.

Account B. This is another current account for your spending money. Each month, calculate how much you can transfer from Account A to use to buy the things you pay for using cash or a debit card – your food, clothes, transport and anything else that is either a survival cost or an important lifestyle choice.

Account C. This is a savings account. The UK has Individual Savings Accounts (ISAs) that allow you to save up to a certain limit each year without having to pay income tax on the interest. This is the best type of saving account to open and, if you exceed the limit you are allowed to deposit in a year, open another – non-ISA – savings account. Set yourself the target of saving enough money that you could, if necessary, live on it for three months.

Beware of getting a savings account that requires you to give notice before you can withdraw money or that charges you a penalty if you do. These usually give a higher rate of interest but, to begin with at least, it is better to have instant access to your money in case of an emergency.

When making enquiries about different types of account, do not believe everything you are told. Like all businesses, banks and building societies want to sell their services and sometimes their staff try too hard and fail to tell you everything you need to know. So do not take everything on offer or at face value.

While we have an obligation to handle wisely the money and other resources we have, we should never remember that we do it in God’s world. The Psalm at the top of the page is attributed to King Solomon, who knew only too well that his enormous wealth was a gift from God.

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Handling money and dealing with debt can be complicated and neither the author nor anyone else involved in the production of these Reflections is responsible for any action you take, or fail to take, based on what is written here. You are invited to put a link on your website to these Reflections. You are welcome to copy these Reflections for personal study or for circulation to family and friends on a non-profit basis. For any other purpose, whether or not for profit, you will require written permission in advance from the author before copying, reproducing or transmitting extracts in any form or by any means, electronic or mechanical, including photocopying, recording or using any information storage and retrieval system.

Sunday, 17 February 2013

Creating a Budget (9)