Hey friend! I’ve got to be honest, I love talking about money. Maybe it’s the business in me or the love of organization but I like to know exactly what money I have, where it is and what goals I am working towards.
I was blessed to grow up in a home where my parents regularly talked about money and taught me different principles. Sure they taught me how to use a check register (?) but I learned how to be aware of everything coming into the account and everything going out (even though at the time it was my pretty piggy bank).
Now I am 22 years old, I still have some school debt I am tackling and I bought an 102 year old house. Overall I am in pretty good standing and I want to share all the life lessons I’ve learned along the way.
TOPICS TO BE COVERED:
Where in the world to start
Do I need to be tithing?
How to Budget (& stick with it)
How to get rid of debt
Do I need to be building credit?
How to be saving for a home
Where you at?
Okay to really kick this off you need to ask yourself a few questions.
- How do you currently feel about money?
- Are you aware of your financial status?
- Is your money working for you?
- Are you a saver or spender? (first reaction to this is typically correct)
- Are you working towards money goals?
Great! Now that you know where you are, you can see what areas you need to be working on first.
How we approach money, especially as Christians, is what’s really going to set us apart. To honor God in our money management might not look like worldly wealth. Being rich shouldn’t be our life goal.
Having a desire to work hard and make money is not bad. Some people are natural entrepreneurs. They were created to build businesses which when successful make money. The world needs these creative people!
The world also needs school teachers, Michaels employees, nurses and everything in between.
Here are three healthy money mindsets for Christian girls:
1.My Father is my Provider
You may need to sit in this, I often do. I get anxious about my money situation especially when it looks like the numbers don’t add up. I often forget God is working even if it doesn’t look like it. I can choose to trust or I can choose anxiety.
And my God will supply every need of yours according to his riches in glory in Christ Jesus. Phil. 4:19
Now to him who is able to do immeasurably more than all we ask or imagine, according to his power that is at work within us, to him be glory in the church and in Christ Jesus throughout all generations, for ever and ever! Eph. 3:20
I am the LORD your God, who brought you up out of the land of Egypt. Open your mouth wide, and I will fill it. (Psalms 81:10)
2. I am in control of how I manage the money God’s entrusted me with
We can let money manage us or we can manage it. God has entrusted us with HIS money. He has purpose for the money we have and we can willingly give back to God and bring Him glory through it or not.
Sticking your head in the sand about your current financial status is not going to allow you to see Him working or allow you to be used by Him to bring Him glory! I am not judging or condemning simply trying to encourage you to see your money as a gift!
3. I will not be more happy if I make more money
Sure a few things could be easier. Sure you could have paid off your school debt. Sure that 1 million dollar home you toured on Youtube looks really nice.
BUT money will not bring you happiness. In fact happiness is fleeting, joy is what we should be working towards!
If you chose to find joy right now, today, your whole life will be an adventure. If you chose to be unhappy until you get another raise, I am afraid that raise won’t satisfy you!
4. I can’t spend money I don’t have
If you start developing this mindset you will be in much better shape in the future! If you spend money you don’t have then you are simply cultivating debt. Sometimes emergencies come up, yes, but that is why we need to be working towards building an emergency savings account.
Where in the World to Start!
Starting can be the hardest part especially if you haven’t been detailed in your past money habits. It can seem overwhelming and near impossible but it’s not! I promise! No matter how much debt, no matter how many credit cards, no matter how many negative numbers you look at, it is possible to get it a grip on your money.
The best place to dig your hands into first is your current financial status. When I use that phrase I mean to have a big picture of what your debts, assets, bills, and savings are.
Another word for this is Net Worth. Your net worth is all your assets (cash, value of your car, money in checking and savings, anything of monetary value) – your liabilities (outstanding debts, school loans, credit cards, money you owe your parents, money left to pay on car, etc) = your net worth!
Grab a piece of paper and write out all your assets. Look at your current bank account amount, look at your savings, look at any larger assets like your car, house etc. Write their total value not just what you’ve paid on them.
Next draw a line to separate and list all your debts. Look at your credit card bills, school loans, personal loans, outstanding medical bills, how much money you owe on your car or house, etc.
Lastly draw a third line and take your total assets and subtract your liabilities and BAM you have your net worth! Good job!
Don’t fear if this is a negative number. We just need an honest view of where you are so we can move forward and make it a positive!
Do I need to be tithing?
This has been a question I’ve been shaking down with God. There are different interpretations of Scripture about tithing but I do believe that we are to be giving some of our money back to God’s house! Our churches are doing God’s work and when we tithe specifically back to them we are building the kingdom of God.
The amount is something you need to decide for yourself. I do believe you should start with 10% and I recommend it be the first ten percent!
I know if I wait until late in the month I get a little panicky. I start to feel like I won’t have enough when in reality I will and I still need to give God His money back first.
” But Ashley I don’t make enough to tithe!”
I’ve heard this before, I promise you’re not the only one that feels like this. I want you to do this. For one month I want you to tithe. I want you to ask God to show up and show you why you should be tithing. I want you to look for the blessings that always come when we live according to how God has called us to.
He gives us life and life abundantly.
Sometimes following God doesn’t make sense. Sometimes it seems smarter to save the money to give it away but we are called to be servants to God! We are called to give in every aspect of our lives!
Do you remember this story from Mark 12?
“Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts.But a poor widow came and put in two very small copper coins, worth only a few cents.
Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.”
How to Budget & actually stick with it!
This is one of my favorite parts of the process and I sit and look mine over monthly! There are several different ways you can do this and I will show you my process.
Let’s start with what is a budget?
A budget is a list of categories that you typically spend in a month. These can include food, gas, eating out, clothes, etc. With each category there is an amount that is how much you are allowed to spend that month in that category. All of these categories added together should equal the amount of income you make in a month.
You need to have a budget. If you don’t you have a high chance you will spend more than you make which YOU CAN NOT DO. If you spend more than you make every month you will have debt which we don’t want.
So how do we build a budget? We first look at what and where you already spend.
How to Observe Spending Habits
1.Look up your statements from the last month on every card you have. Now take out another piece of paper and write out common categories and how much you spent.
Be completely honest with yourself! When you look at your spending habits you can build a better budget for yourself. You wouldn’t like my budget because it was created for me! I like to spend more money on books than clothes and you might be the other way around. Be true to yourself!
2. Now that you have all the categories written out analyze them. Where are you overspending? Where do you need to be using self-control and saving? Are there any categories you know will be added soon? Like will your rent be going up soon? Or electricity because of summer?
3. Next you need to build a new budget using the information about your spending habits you have collected. See below!
How to Build a Realistic Budget
1.Grab another piece of paper and start listing all the categories. Try to start with the most important ones at the top, this will allow you to prioritize well.
2. When you have all the categories written out fill in all the fixed categories meaning all the ones that are around the same amount each month. Like I typically use 60 in gas each month and my mortgage is $539.60.
Estimate and fill in all the rest of the categories
3. Add all the totals together. Does it equal your income? If not tweak and try again!
This budget will change. You will make it through this month and some categories will work and some won’t. You just need to keep moving forward!
? Look at you go! You’ve already created a personalized ready to use budget which is half the battle!
Now let’s look at how to stick with it!
You should use this app
An awesome app that I use to stick with my budget is Mint. I use the Money Well Managed Workbook to create and analyze my categories. Once I’ve built my budget I use mint to follow it digitally. They allow you to create all your own categories and amounts. They will sync with your banks information and your school loan! You can track everything in one place.
Read this article for more information on Mint!
Ask these three questions
Besides checking in on mint often, I use a mental process of questions before I make a purchase that isn’t absolutely necessary.
- I say do I need this/have purpose for this?
- Is it in the budget/can I save somewhere else to buy this?
- Is it investment/will it last?
After answering these questions I’ll purchase or I won’t. I am naturally a saver so it’s easier for me to say no then yes. Know yourself. If you tend to over spend shopping for clothes, limit the shops you go into. Be purposeful.
Ask God for Wisdom
On bigger purchases we should be going to God for wisdom! James 1:5 says “If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.” God gives wisdom if we ask Him for it.
This may seem weird to you but the more you invite God into your daily life, the more you’ll see Him there. He wants to be doing life with you. He is a gentleman. He will wait for you to invite Him.
DEBT DEBT DEBT
Everyone’s least favorite subject. I get it, I have it too. It can be overwhelming and seem like it’s never ending (hey interest!). You can get rid of it if you have a plan of action to do so.
First you’ve got to look at what you have and how much it is.
How to Analyze Your Debts
1.Pull out ANOTHER piece of paper ? and write down all the debts you can think of. Look up exact totals if you need to.
2. Now look up their interest rates. How much in interest are you paying?
3. Prioritize based on which one has the highest interest. Start to tackle that one first.
There are many different methods of doing this like the snowball method etc.
There are two ways to pay this off faster. Lower your spending or raise your income.
If you chose to lower your spending go back to that budget category and cut again. If that isn’t possible then consider raising your income.
This can be another part time job or a side hustle. I am not going to dive into these categories in this post but I can if you are interested!
Many people have different opinions on debt even all looking at the Bible. There are different interpretations of Scripture. I personally want to get rid of my debt as quickly as possible. I consider my school loan of higher importance than my house loan. Why? Because I can sell my house and pay off my debt. Unfortunately, I can’t sell my college degree to get rid of my school debt.
“What happens if I refinance my loans?”
Refinancing your loans looks like this: consolidating them into one loan with often a lower interest rate. That means if you are paying for three different school loans from three companies you can apply to get them refinanced. This can be a great option especially if you are paying an outrageous amount of interest. I can’t tell you to refinance or not because I can’t see all your loans but ask around for advice on this and shop around to different companies who refinance. You can ask questions and tell them you aren’t ready. Gain all the information you can!
You have to make a plan of action that is best for you! Ask God for help. Ask Him to come in and help you honor Him with your finances. It’s crazy what he can do when you invite Him into different areas of your life.
Let’s Set Some Goals
Getting the right mindset and building a budget are important stepping blocks to help you reach your goals.
This works into that saying I mentioned earlier. Either your money works for you or you work for your money. When you set goals and make action steps to attain them, your money is working for you.
What are examples of money goals?
- Being debt free (on my list)
- Purchasing a house
- Going on vacation to Disney World, the Bahamas, Thailand etc.
- Starting my own business
- Building my Savings to be equal to 6 months of my salary
- To stop living pay check to pay check
There are so many different things you can working towards but don’t choose too many, that can be overwhelming.
Two good goals to begin with are
- Save $1000 for life mishaps
- Pay off my debts
Once you choose your two goals you need to build an action plan to accomplish them. For example if you saved $200 every month for five months you’d complete your first goal!
This is specific to you. There is no right or wrong way of doing this. If each month you are only $1 closer to your goal, then you are closer to your goal.
Do I need to be building my credit?
The answer is yes! Think about it. When you are ready to move into your first apartment you’ll need some credit. If you need a loan, you’ll need credit.
It’s important to start early because then you can get better rates!
“What is a credit score?”
A credit score is a number that represents how trustworthy you are for financial institutions. This number is impact by many things some of which are paying your bills on time, managing your credit cards well, how long you’ve been building your credit, etc.
How can I start building my credit?
Do you have a credit card/are you responsible enough to manage it?
I am going to repeat myself: Do not spend money you don’t have.
If you can’t follow this rule, don’t get a credit card. If you can use self-control, get one! I recommend Discover or Capital One because they are great credit card companies, especially when just getting started.
Use this card but do not use more than 30% of your credit limit. This will drop your credit score. I personally pay mine off every month and this is the slower way of building your credit. If you want to build credit quickly leave $50 dollars on it monthly, pay the interest and watch your credit score go up!
How did you buy your house?
This is a long story, one I want to make a video about but in a simple steps I did this:
1.I Saved a lot for years. It took me a while but I started saving my last summer before I graduated college. I started working for a friend and it became my side hustle. I managed his businesses social media presence. Each month I put most of that income into my savings.
2. I researched the market. I looked at my area and I looked at prices. I was looking for a decent house around $100,000. Understand I live in a small town in the North Georgia mountains, this was hard to find but our cost of living is relatively low. I was saving for a downpayment for 10%. Check your state sometimes low downpayment options are offered for first time home buyers BUT watch for extra “insurance” or PMI. You do not want to pay for this, it does nothing for you. The normal downpayment amount without PMI required is 20%.
3. I saved for the closing costs. These are the attorney fees, insurance, etc. My closing costs were $1300.
4. I gave it to God. It was a four-month process but God provided the PERFECT house for me and it was such a blessing through everything. God’s hands were all over it. More to come in a video!
If you are convinced you are ready to tackle your finances grab the $10 Money Well Managed Workbook Here! I created it specifically for those really trying to grasp their financial standing and create money freedom in their lives.