Spending With Purpose, How To Create A Budget That Works For You

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If you were to ask our son what he likes to eat, he would tell you that he likes red snapper. He’s five years old, and he likes red snapper. While I’m pretty sure I had never even heard of that particular fish until my palate was far more developed than his, I do know that I never would have ordered it for the same reason as him. He walked past a cooler full of red fish and picked it out while at a fish market in Puerto Rico when we were there on a family vacation. The next day he did it again. And he ate the entire fish. Both times.

I’ll never forget walking with him past the line of whole fish, with their eyes still in, as he told me that he wanted to eat one of those red fish for dinner. It was one of those moments as a parent that you are both very proud, and a little freaked out by your kids.

When you ask our kids what their favorite memory from 2017 has been so far, both of them will tell you about our trip to Puerto Rico. Before you get the idea that we are the family that is always taking extravagant vacations, let me tell you that we really are not.We do, however, prioritize the time that we take with our children to experience life as many ways as we can, while they are still young enough to be amazed. It fits within the purpose that we have set as a family, and our finances can either support our purpose, or they can restrict it. We choose to let our finances support the purpose of our family.

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We have not always been able to create travel experiences that are memory makers, especially early on in our marriage. The road to get to where we are has been long, and our experiences have helped us to understand the discouragement that can be felt when you feel like you are the “before” picture in the story, and that there is no way you will ever be the “after” picture that you are hoping for. You may find yourself somewhere in the process, having made a couple of good decisions and a couple poor ones. We are right there with you. Fortunately, we are on the upswing and a big part of the reason is that, regardless of the percentages in our budget, our purpose has remained consistent.

When we were married over 16 years ago, our first steps financially were a little bit rocky. We were married very young, before either of us had graduated from college. When we returned from our honeymoon, I had lost my job and ended up working the overnight shift in a wood shop. After an injury at work left me unable to work for a few months, my wife had to find a job that was flexible enough to allow her to continue classes full time, and provide enough income for us to live, while I sat at home unable to work. That was the first six months.

After the sting of the first six months, we moved on to more challenges over the next few years. First, a failed business left us with debt, after which I decided to go back and finish college, which was really great however that added the additional stress of student loan debt. That was followed by years in very fulfilling (read: low-paying) jobs, more job loss, and then grad school. Circumstances did not look good from the outside looking in.

Regardless of how things looked on the outside, we have always been committed to a couple of guiding principles. We decided early on that it was more important to be focused on who we were striving to be, in spite of what our circumstances dictated, and how our budget reflected our purpose in the middle of everything that was happening in life.

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Instead of working toward being able to do something, we’ve tried to use our finances to become something. Let me explain. When we were first married we decided that we were willing to make as many difficult decisions financially as possible as early as possible, in order to not have to make as difficult decisions later on. This has become one of the purposes of our family budget, and while the percentages may change depending on our income, we have committed as a husband and wife to continue to make sacrifices when necessary to provide margin in our finances for future opportunities when they come.

A second principle that we decided on was that we would live generously. We may not have always been able to give as much as we would like, however the consistent theme regardless of margin in our budget is this: we determined that people will feel loved and always welcome, from the children in our neighborhood playing in our backyard, or friends returning from serving overseas. We will always live generously, and are committed to teaching our children the same.

In order to live out our purpose requires some very practical steps. Every year, we sit down and discuss what our income and expenses are, and where we need to be disciplined to accomplish our purpose that year. Our budget is divided into living expenses, giving, long-term savings, short-term savings, and spending. While each of these can fluctuate a bit year to year, they can provide consistent general guidance and help us stay committed to our purpose, which does not change year to year.

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Living Expenses

  • Generally between 50-55% of annual income.

  • Includes housing, transportation, bills, food, and debt reduction.

Long-term savings 

  • Between 10-16% of annual income.

  • Saving towards long-term goals, like retirement and lifestyle changes in the future.

Giving

  • Between 10 and 15%

  • Includes giving commitments such as sponsorships and annual giving, and also provides margin for new opportunities when they are available.

Short-term savings

  • Between 5 and 10%

  • Allows for an emergency fund, as well as short-term fun, like vacations and Christmas gifts.

Spending

  • Between 5 and 10%

  • Ensures that you have margin for enjoying the things that you like to do as a family, like date nights and coffee shop visits.

We have found that working within these guidelines has helped us to work toward the goals that we have and commit to the purpose we have decided to pursue. One of the tools that we use to help us stay on track is to use separate bank accounts for each area. Each paycheck we receive is divided among different accounts that all serve a different purpose. Our living expenses are then paid from our “Bills Account”, while our spending is done out of the “Spending Account”. Likewise, all of our savings accounts receive funds with each paycheck that comes in. These practical steps have allowed us to focus our energy on finding ways to commit to our family purpose, while helping us to stay organized.

While it has taken us years to develop a system that works well for us, we are working on helping our children learn the same principles as they learn to align their finances with their purpose. There are several key learnings we teach our children about finances and budgeting:

  • We teach our children that we live, above all, generously, knowing that we have been given much and that we can make an impact around us if we use what we have to serve others.

  • We teach our children that we live disciplined lives that require us to say no to things we may want, even when we can afford them, especially when by saying “no” we can put ourselves in a position to say “yes” when it really matters.

  • We teach our children that we make mistakes, and that there are consequences when we do. We teach them that often correcting mistakes takes a lot of work and even more discipline.

  • We teach them that by not spending everything that we have (saving) we can experience things as a family that we wouldn’t be able to if we simply spent everything that came in.

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To help our children learn this, we divide everything that they get, whether money from grandparents or money they earn, into three jars: giving 25%, saving 25%, and spending 50%. Like anything valuable that is learned, we want to help establish basic standards while allowing them the freedom to grow and become their own people.

I don’t know if you ever want your children to eat red snapper bought at a fish market, or whether you are able to provide your children with everything they want. I am convinced, though, that defining a purpose for our personal finances can help to take out a lot of the moment by moment decisions that seem to get in the way of managing our finances well. None of us make perfect choices every day. The key for us, though, is living with the understanding that there is more to managing our finances than deciding what we will and will not purchase. For our family, our focus is on who we want to be, and using our finances as a tool to be those people.For our family, we will think globally, live generously, and demonstrate truth and love wherever we go. Our hope is that whatever the purpose that you are pursuing as a family, your finances allow you to achieve it. As you commit to achieving your purpose with your finances, you will get much closer to the “after” picture that you have always desired for your family.

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Benn and Amber Stumph are passionate about living intentionally and have at times been accused of planning too much. Often found sipping coffee or sharing a meal with friends and family around the Twin Cities, MN, they desire to inspire others to create a life they love. Parents to Elise (8) and Nolan (5), they have been married for 16 years and have committed to leaving a legacy together, whether building their own house to serving communities in need in Latin America. Together they lead Copper Bottom, an organization dedicated to helping people learn to live generously and find ways to invest in others. To contact, email amber.stumph@copperbottom.org.

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