How To Always Have Extra Cash In Your Life And Business Through Budgeting


Questions were going around the table. Someone had asked a question about how to extract savings out of corporate revenue. Another businessman asked about the best approach to allocating business resources.

His question went something like this, “what do you do with excess cash in your business? How do you know where to split up your revenue into different buckets?”. I found these questions fascinating because what to do with business revenue is a problem for many entrepreneurs. This is the reason so many business owners mismanage revenue. I know of a business owner who spent over $50,000 at one time because his business had recently come into about $300,000. Since he did not have a plan before the money came, the new cash made his decisions for him. If we do not learn how to control money, it will control us. The aforementioned conversation and example deals with human behavior. My view is that if those two entrepreneurs understood and practiced budgeting in their personal lives they would have been able to apply it to their businesses with moderate ease. Any reader of Growingstartup knows that a business will mimic the mindset of the person running it.


Practical Terms

Many people do not like or know how to budget effectively so they spend according to how they feel or what the circumstances are. As Faith Oyedepo said

“if even governments create budgets then you should see the wisdom in having a plan for your income and expenses.” .

Below I am going to explain and teach you a general format that will help you create a budget for yourself and your business.

The general framework I’ve found is tithe, savings, investment, expenses. In that order. Then we use whatever is left for the rest of the pay period. I will explain better below.

Budgeting wisdom 1:

Decide on what you will spend on, then you can spend the rest without guilt

This is creating priorities. Decide in advance the things that will take up most of your money and what things are secondary. If going to the movies once a week is important to you then


Budgeting wisdom 2:

Save for the goal

Save for things or save with a goal in mind. Many people have no extra cash or savings because the money was not set aside for a specific purpose. Try to save $5 a week for one month and buy dinner with the $20 at the end of the month. This will help you to be able to save for a car, business expense or vacation.


Budgeting wisdom 3:

Give money an assignment.

I’ll use a true story to illustrate this principle.

I heard Kenneth Copeland tell the story about how his father was offered millions of dollars to tell a lie in court in favor of a disgruntled colleague from work. Kenneth Copeland’s father did not stand to gain any financial reward from the corporation if he told the truth so the obvious action seemed to be to side in with the disgruntled colleague and cash out later. To Kenneth’s surprise his father told the truth in court. Later when Kenneth asked him why he told the truth, he replied “I decided to tell the truth about 25 years ago.” “You knew this would happened 25 years ago?” Kenneth responded in bewilderment. “NO! said his father. “ I decided 25 years ago that I would never lie. This case did not change that. “.

That story impacted me deeply when I first heard it. It is the testimony of a man who had set his values and was not going to change them regardless of external pressure. I tell this story to illustrate how people who manage money well usually have values that are set in stone even before the money comes.


To illustrate how this works in practice.

Let’s say I want to buy a $700 phone as a birthday gift for someone next month. I will write that down for the month of January and make sure I only spend that amount on the phone. Let’s assume that is the only gift or extra expense outside my bills and other obligations for the month of January. Let’s also assume that the seller offers me two phones for $1200 instead of $1400. This would be no temptation at all because I already decided a month ago that January’s only extra expense would be $700. I would recommend starting with something small. If you need a new shirt next month, write it in your Extra Expense or Miscellaneous column. You will feel much better and have greater control of your finances.


Extra budgeting tip: make a list of all the personal and miscellaneous expenses you would like to make in the future and refer to that once a month. Cross out items that you no longer find necessary and add some new ones that you would like. These should be wants, such as luxury clothing, cars, extra homes etc.

What items/columns/buckets should be in my budget?

  1. Priority: The “got to pay it” stuff about 50%-60% of income

Includes the tithe, bills, obligations, household expenses, insurance, credit card payments etc

  1. Investments: What you want to spend on your dreams and investments (personal development) 10%

Includes school, courses, treasure bill, business investment in a business, shares, getting out of debt.

  1. The miscellaneous: 10%

Free will offerings, gym membership, groceries, clothing, entertainment, gifts for friends and general chilling.

  1. Savings 20%

Long-term savings could be saving for a child’s college fees or a home. Short term savings could be saving for a vacation or automobile.

The above is just a framework but it is a good one to think about whenever you receive money. Whatever does not get spent can be rolled over to the next week or month depending on your lifestyle.



If you gave me $1000, it would get split up something like this.

Tithe 10% =$100

Important expenses and obligations 40% = $400

Savings 20%=$200

Investments 10%=$100

Miscellaneous 10%=$100



The things that will make us effective financially in our home

  1. Only allow budgeted expenses no matter the feeling, need or desire. It helps with discipline, prudence and its wisdom.
  1. Spend cash or use a debit card as much as possible. Even though credit is good for some expenses, only few people even understand the financial system well enough to take advantage of its long term benefits. I tell all our clients to only use credit if the return is 4 to 10 times the amount spent. Debt is a bad master so learn to spend only what you have the money for already. I know what it is like to buy something and credit and not have the money to pay when the debtor comes calling. I have seen families publicly humiliated because of debt.
  1. If you have someone you can trust like your spouse or business partner, have a 30 minute session once a week where you discuss weekly expenditure. If you are married, perhaps it could be after dinner on Sundays. Try not to make it take more than half an hour of your time because money does not deserve to take up too much of your thought-life. You will know how much you have spent and you can decide together to reduce something by $10 or $50 and move it into our savings or investments bucket.
  1. Prudence versus El Cheapo

Prudence is when we consciously have things we spend money on even before money comes. We can decide we won’t do dessert during the week so we can save that money for a dinner on Friday night. Prudence is spending at your level today. Prudence is thinking long term.


The simple table can be found at–pEKUDRsG–/1920cazcf1fxzpng.png



If we want more guilt-free income you can either get lower fixed expenses like lower internet or phone subscription, move to a cheaper city, get more income or just spend on some that matters to us.

Like I said, this is a general framework so tweak as you see fit.

Do you have any budgeting tips that I can include in a future post? Please share.