Everyone Needs a Budget

-

Everyone Needs a Budget

By Mike Peek

“For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?” (Lk.14:28, NASB95)

Budgeting has increasingly fallen out of favor among everyday Americans. Many households now rely on credit to bridge the gap between income and expenses, often using credit cards or loans to cover shortfalls rather than strictly managing cash flow.

Very few people set aside money in advance for major future purchases such as a car replacement or vacations. Instead of saving over time, many choose to finance these expenses when the need arises, often resorting to loans or credit cards to make up the difference. This reactive approach can lead to increased financial stress and long-term debt, further highlighting the importance of proactive budgeting and planning.

For example, on January 1, 2006, Darlene and I faced a negative net worth. At that time, we owed $22,752.14 more than we had in assets to sell. Our total debts to creditors amounted to $187,345.83. This situation made it clear to us how easy it was for spending and borrowing to outpace our resources.

Twenty years later, we are debt free with a net worth more than a million dollars. Do you want to know how we went from a negative net worth to millionaires? It all came down to one powerful commitment: we resolved to live on less than we made through disciplined budgeting. By consistently spending below our means and refusing to let lifestyle creep sabotage our progress, we gradually built financial security and wealth. This approach was not always easy, but the payoff has been life changing.

Guided by following the Ramsey Baby-Steps, we went from a negative net worth, living paycheck to paycheck (in reality, spending more than we earned) to becoming debt-free millionaires. By sticking to these principles, we prioritized paying off debt, living on less than we made, and consistently building wealth. This structured approach gave us the discipline and clarity needed to turn our financial situation around and achieve lasting security.

Recently, a couple of coworkers were discussing credit scores and looking to buy a new automobile. I commented that I do not have a credit score. My credit score is undeterminable because I do not borrow money or use a credit card. One of them asked, “How do you buy a car?” To which I answered, “I save for the purchase and pay cash.” This response surprised them, but it perfectly illustrates the benefits of disciplined budgeting and living below your means. By planning and intentionally setting aside money for large purchases, it is possible to avoid debt entirely—even for significant expenses like a car.

I am writing this because Darlene and I have financial peace and I want others to have what we have. Having experienced firsthand the freedom that comes from living debt-free and knowing exactly where our money is going, I feel compelled to share our story. My hope is that others can benefit from our journey, embrace budgeting, and ultimately achieve the same sense of security and peace that we now enjoy.

 


Popular posts from this blog

Financial Fitness: Freedom From Debt

-
Image
Financial Fitness Freedom From Debt by Mike Peek We began the year, 2006, deeply in consumer debt. We were a household of four, husband, wife, with two children: a boy, and a girl. We had good jobs and were driving new automobiles. From the outside, we were living the American dream; however, we were in a budgetary crisis. We were living paycheck to paycheck. It was as if our checking account was a money laundering service, moving money from our employer to the debt industry. I was a master juggler; therefore, we never missed a payment and had FICO scores above 800. I knew what we would have available, after making credit card payments, automobile payments, mortgage payments, and utility bills to spend on groceries, clothing, and lifestyle. We would use the amount, between what we owed, and the credit limit to pay for things. I was even able to predict interest, thereby, avoiding going over the credit limits. It would be a strain for awhile, then we would get a credit card in the mail...
Read more

Purifying Doctrine

-
Image
This past weekend; Friday, Saturday, and Sunday I spent 8 hours each day alongside 100 other Christians who came from all over the United States. We were in Houston, Texas, preaching the gospel in open-air, passing out tracts, and talking with people. We were broken up into 10 teams of 10. The event was Super Bowl LI in Houston, Texas. On Friday and Saturday we surrounded the outer complex of Discovery Green in Downtown Houston, the location of what was called the Super Bowl experience. On Sunday (game day) we surrounded the outside of the stadium. One could not enter or exit Discovery Green on Friday or Saturday, or enter NRG Stadium on game day without having heard at least a portion of the gospel. The gospel that we preached, is the same gospel that Christians have been proclaiming through the ages. “That in Jesus Christ, and for our salvation, God has entered human history in a unique way.” 1  God became flesh in the person of His only begotten Son Jesus Christ and...
Read more

Give Purposefully and Cheerfully

-
Image
  I have worked in the health care industry for more than half of my life. From doctors to nurses to ancillary personnel high consumption is the norm. To live on less than one makes as abnormal. Several years ago, we made a conscious decision to be abnormal. I recently wrote about our journey through the seven baby-steps as laid out in Dave Ramsey’s book, The Total Money Makeover. I wrote both about our successes and our struggles. Today, living in baby-step seven, we find ourselves in a much different place than we were just a few years ago, much-less, when we began that journey. “There is one who pretends to be rich, but has nothing; Another pretends to be poor, but has great wealth.” (Proverbs 13:7, NASB) Often, in the media, and among the populace, there is a misunderstanding about wealth and income. A high income does not mean wealth. Income usually defines level of consumption rather than wealth. Income is what you bring home but wealth is what you have. If you spend everyth...
Read more