The Next Right Step

This question came in yesterday on my blog, “What is the Best Way to Organize Your Finances?”

I know that I have to be intentional about allocating my money otherwise it tends to wander away. Even though my income has varied over the years, my formula has not. Here is how I organize my finances:

1. I Pay God. I began tithing right after college before I became a pastor. I know that when God is first, I have enough.

2. I Pay Myself. Here’s my logic: I don’t want to leave myself without savings, especially when finances are tight or in turmoil. We all need a reserve fund and money for retirement.

3. I Pay My Debts. Personally, I keep my debt limited to my house. However, I have a friend who had a very nice motor home he bought a year ago. He saw the change in the economy and so sold it at a loss. Smart? You bet! He got rid of the burden.

4. I Pay My Expenses. When money gets tight for us, or we just want to see where we are spending, we go to cash envelope system. This is difficult at the outset, but you will save a ton of money. The idea behind the envelope system is pretty simple. By distributing your cash into manageable categories, you can control spending, manage receipts, and fine-tune your spending plan. Besides it’s a proven fact, when we use cash we spend less overall. Check out this website – www.daveramsey.com/etc/cms/index.cfm?intContentID=3461