Solving the 'Crime'

Accountability & Budgeting
In practical application, budgeting begins with detective work.
Like they say on television and in the movies, “Follow the Money!”

Becoming a ‘good’ steward requires accountability. How can one be a good steward and get out of debt without knowing where their money is? Proverbs 27:23 says, “Be diligent to know the state of your flocks, and attend to your herds;”

Initially, we have to become ‘detectives’ and solve the ‘crime’ by answering the question, “Where did the money go?”
Past accountability is important. One cannot change spending habits unless one knows those habits.

A budget is an ‘accountability’ tool. Budgets serve four basic purposes.

1. Budgets explain where the money went (in the past) [The Autopsy Budget].
2. Budgets determine where the money ‘has’ to go (to pay the bills in the future).
3. Budgets ‘show’ where money is being unnecessarily spent.
4. Budgets are a plan to accomplish financial goals (the first of which should be - get out of debt).

The Autopsy Budget - The detective work begins here.
This is the budget that examines were that money has gone in the past.
A question and a quote:
How can one plan for the future without know what has happened in the past?
“Those that do not learn from history are doomed to repeat it!”

It is surprising how many people have budgets, try to ‘stick to them’, but can not ‘explain’ where the money went.
Comb through the past three months of credit card bills, receipts, bank statements, and anything else that ‘explains’ where the money went and record it.

Break down spending into categories of expenses.

1. Giving
2. Mandatory Expenses.
1. Rent
2. Car Insurance
3. Utilities
4. Water
5. Home Phone
3. Expendable Expenses
1. Food
2. Clothing
3. Comfort Items
   
4. Slave Expenses
1. Credit Card Bills
2. Car Payments
3. Cable TV Bill
4. Internet Service
5. Mortgage Payments
6. Cellular phone
   
5. Exigent Expenses
1. New tires
2. Medical
   
6. Unknown (any part of the income that is ‘unaccounted’ for, but definitely spent)

This list is by no means ‘exhaustive’, or written in stone. Some items may be under different headings. For example, a cell phone in most cases is a convenience, but for some, it is a ‘mandatory’ expense. I have a friend that is so tied to his cell phone (he is on call 24 hours a day) he had his ‘home’ phone service discontinued.

I know there are many items on the list, start simple. Start with pay stubs and deposits...One can not tell where the money went without knowing how much there was to begin with. Move to the expenses that are ‘known’, the rent, the utilities etc. That gives one a ‘frame’ to begin with.

This is hard work. It is like filing an income tax return repeatedly. Becoming a freed slave is worth it.