BUDGETS MADE EASY

Dear CEF Leader!

Simple advice on budgeting.

One of my clients has the following financial Motto

*PRAY *PLAN *PROCEED *PROFIT *SOW

I think the above is a very sound financial motto to have.

First of all, since we must always make sure that we are in Gods’ will by praying about all situations/ tasks/ projects etc. And this very definitely includes our budgeting for our organisations. Is your budget according to God’s plan? Ask him! Pray for His guidance, inspiration and wisdom!

Then Proper Planning is always necessary. Write down your goals, make your plans on how you are going to reach them etc. Then you need to plan (estimate) what these actions are going to cost you (your expenses) and what income you are going to have to make your plans work, hence we are talking about budgeting. Therefore proper budgeting is ALWAYS an essential part of proper planning!

If you are then assured that you are in the Lord’s will and you have your plans together, you need to move, act upon these plans! Far to many people have proper plans but fail because they simple do not work their plan. We in CEF for instance have a goal to see at least two people per week promoting CEF. We need to plan therefore to see two people per week and also then PROCEED and DO it – otherwise the plan is useless. SO PROCEED and get your plans in action. Do the talk (plan) and also WALK the talk (PROCEED)

Then, I believe, you will profit the fruits of good planning and see the Lord at work providing in all your needs.

And once we receive (profit) we immediately have a responsibility to also sow back into the lives of others either by way of a tithe or other ways of helping others or contributing in some way – yes also financially!

If people in the secular world have this as their basis for financial planning, I think we in the Lord’s work must so much more adhere to these principles.

I hope your are therefore inspired to do proper budgeting or financial planning for the Lords’ work/ your ministry.

In essence a budget has two parts:

The INCOME part

And the EXPENSES part

You always start with an OPENING BALANCE (i.e what funds you allready have available)

Than you add

Your income or projected income to that

And minus

Your expenses/cost

To get a CLOSING BALANCE

The closing balance could be a surplus

meaning you have some funds left after all your expense or

You might end with a shortfall

meaning you actually short money and do not have enough funds to cover your expenses.

At the end of the month you carry this amount over to the next month as your new opening balance.

i.e.

opening balance + income – expenses = closing balance

You will see that the SPAN budget reports you need to fill in /receive quarterly is compiled this way.

Please also see the following notes on budgeting, which explain a few more things. Also very importantly, please refer to your CEF ministry manuals, which cover the complete spectrum of financial budgeting and principles of CEF.

Enjoy and may you all be good stewards of the Lord’s finances and receiving much blessing as a result of it.

Ernest van Zyl

CEF SAIOR Finance

Budgets Made Simple
Too often people hear the word "budget" and immediately associate the words "complicated" or "restrictive." Creating a budget can be simple and adhering to it can be quite rewarding. The process of creating a budget helps individuals and/or organisations to understand income sources and recognize fixed and discretionary expenses. By following these simple strategies, individuals and organizations can set and attain their financial goals.

Underestimate Income
Some income sources are known and others must be estimated. Whenever an individual has to make an estimate, it is better that she be conservative by using a figure that has a high degree of certainty. For instance, although an organisation might have fixed donations/income, some income might vary from month to month. A conservative estimated is therefore needed.

Check the Budget Status
Budgets are only effective if they are used to guide financial decisions. Actual income and expenditures should be compared to budgeted figures on a regular basis. When expenses exceed the budget, future purchases may be delayed or scaled-down to maintain financial stability. One of the most common financial oversights is failure to curb spending when income projections are not met. Keeping expenses within budgeted amounts is only meaningful if income estimates are also met. If income falls below projections, make adjustments to reduce spending by a similar rate. In a similar manner, higher-than-expected income or lower-than-projected expenses provide other financial opportunities.

Analyse Spending Habits & Income Sources
By coding income and expenses to budget categories, organisations can use the information to strengthen financial understanding. This technique will help identify "small" recurring expenses that may have a surprisingly large cumulative effect. Categorizing transactions will also help identify income and expenses that are related. Such analysis can also suggest areas that the individual/organization may wish to manage differently.