SA Accounting Network

Accountants and tax consultants

021 785 3306

Here is the link to the spreadsheet I used in the video




Part 1 - Closing the circle

Part 2 - Obligations, necessities and wants

Part 3 - The 2 week rule

Part 4 - What goes into the circle?

Part 5 - The concept of a budget

Part 6  - 4 steps to closing the circle

Part 7 - why budget?

Personal budgeting principles

In order for us to answer the question “how much is enough” we need to draw a circle “as it were” around the money we use for personal consumption. When this question “how much is enough” isn’t answered this person lives with an “open circle mentality” and any financial increase will only make the circle grow bigger, where someone who has answered this question lives with a “closed circle” and any financial increase will be prayed over to discover the purpose for which the Lord sent it instead of assuming that it must be used to increase the circle of personal consumption.

Open circle = ever increasing

Closed circle = fixed

What should be in this circle, definitely obligations and necessities, but what about wants? Can a Christian spend money on wants while people in other parts of the world is starving? It is God’s delight and pleasure to provide His kids with things they desire – however the “what and when” of including wants into the circle must be decided by asking the Lord His opinion. We include it in the circle as we have prayed over it, and believe it’s the right thing and right time to include the item, not merely because we want it and we are pressing God for the money like a spoilt child to get it.

So in order for us to answer the question “how much is enough” we need to know what our obligations, necessities and wants are, and a projection in the short term, perhaps over a period of a year. The world calls this concept a budget – but this word strikes fear in many people’s hearts as its seen as a restrictive tool which controls their lives. The reality it’s a tool to measure our travel through time with money. It’s a tool we can use to make money serve us!

We must answer this question in writing – the story of the diet

So step 1 – get a “little black book” to keep track of your expenses for at least three months – spend like you normally do, but record everything, no leakage! Record daily or weekly and sort according to type of expenses.

Step 2 – total each month so you can see what you spend on each category each month. After three months you will have enough data to be able to close the circle.

Step 3 – make a list of material wants in your life.

Step 4 – Prepare to close the circle – God has an opinion on each of these items as He is interested in your finances, now that we have records of past spending you can ask Him about actual numbers to put into each line – simply ask the Lord “Is this number too high, too low or correct?” If you are married it’s important to pray with your spouse over this and to come into agreement – if not married then seek a friend – its highly beneficial if you have some form of accountability. Remember you are busy with a spiritual battle so expect some resistance – you are tearing down strongholds! Remember when your financial house comes in order then financial overflow begins to take place!

During this process you will see certain amounts are fixed – like rent, bond, car payments – these are obligations – non optional expenses.

Necessities can be changed by not buying these items or buying less of these items or where you buy these items. Remember that you can still change things in your circle – allocate funds to where there might be more demand in certain periods.

 The wants list must now also be prayed over to see what needs to be included in your circle – divide these by 12 so that God can release finances over a period of a year – only buy these items once the funds are available.

Compare your income with your expenses – there will be one of three scenarios

1. Income is less than expenses

2. Income equals expenses

3. Income is more than expenses

Money must be spent in sequence of obligations, necessities and wants regardless of which scenario you find yourself in.

If you find yourself in scenario 1 – don’t despair – remember you are in agreement with God – let faith arise in your heart to believe God for an increase in income! God has creative ways of increasing your income! If you have closed the circle then He is in agreement with your proposed use of money! Remember God wants to take you past the point of income equalling expenses to a point of overflow – so that overflow can be used for His kingdom!

Review your circle at least once a year – or if there are significant changes in your life. In each stage of your life the size of your circle will change, and therefore it is impossible for someone else to answer the question for you – you need to answer it for yourself with God’s help!

God’s heart is to get money into your hands as a flow through for His purposes in this world – it can be likened to a hosepipe through which water needs to flow – some hosepipes as plugged – nothing gets to His kingdom – others are full of holes due to “open circles” in personal consumption.

Remember the mammon spirit will try and convince you its too much work – too restrictive – too controlling, but in reality a closed circle is liberating – you know exactly what you need and excess can be used for the extension of God’s kingdom.

With a closed circle you are the master and money is your slave!