A Formula for Financial Freedom (5 of 6)

Here is the budget at a glance...

GENEROSITY = GROSS – (Tithe + Tax + Thrift + Tally + Treat)

Gross = all the money earned before taxes are taken out.

Tithe = 10% of gross income OR 10% of net income and tax refund

Tax = all federal and state income tax, social security and medicare withholdings

Thrift = 1-20% (match percentage of tithe or adjust as needed) of gross paid to D.I.P.S.

• Debts = ¼ thrift goes toward paying off smallest debt first (in addition to minimum payment)
  
• Investments = ¼ Thrift goes toward building an investment fund for 401k, mutual funds, stocks, and/or bonds.
  
• Purchases = ¼ of the Thrift fund goes toward saving up for bigger purchases.
  
• Savings = ¼ of the Thrift fund goes toward saving for emergencies.
  

Tally = the total monthly amount of money paid toward bills and expenses


Treat = money spent for personal enjoyment

Generosity = amount of money left over to be a blessing to others


“A budget is telling your money where to go instead of wondering where it went.” – John Maxell


Tomorrow, in the final installment of this series, I will be posting a worksheet to help you calculate you personal budget.