There is a story about Venerable Fulton Sheen I enjoy sharing that also makes a point about the importance of planning. He was in Philadelphia to give a talk and had to get from the hotel to the convention center. He didn’t have directions and ended up getting lost.

He came across some boys playing street ball and asked if they could provide directions. They asked him what he was going to be doing there. He said, "I’m going to give a talk on how to get to heaven. Would you like to come?" The boys’ response: "We don’t think so. If you don’t know how to get to the convention center, what makes you think you know your way to heaven?"

That’s classic Archbishop Sheen. It’s a good reminder that if we want to reach our goals, including our financial goals, we need a plan. Our Lord tells us as much: "For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’" (Luke 14:28-30).

The archbishop got lost on a relatively short walk. Our financial lives are much more complex, yet, too often, we choose to "wing it." The result? We don’t save, we incur unproductive debt, and we fail to prioritize our resources based on God’s design for our lives.

What’s the solution? An effective budget, which is like a "financial GPS."

Here are important attributes of an effective budgeting system:

It should work for you. There are many types of budgeting systems ("My Veritas Plan" tools are available at VeritasFinancialMinistries.com; Mint.com (free) and Quicken (paid) are also good choices), but it doesn’t do you any good to have the latest and greatest program at your fingertips if you don’t use it.

See the big picture. My personal preference is to use an annual budget with year-to-date tracking of income and expenses. I also like a system that gives an overview of spending priorities by listing amounts spent in core categories as a percentage of gross income.

Record complex transactions. When recording paychecks, I recommend recording "gross income," then showing all deductions as expenses. Credit-card purchases should be coded to the appropriate expense account in the month purchased. Big-box store purchases can be split between appropriate categories (put a new TV and groceries on different lists, for example).

God love you!

Phil Lenahan is president of

Veritas Financial Ministries

(VeritasFinancialMinistries.com)

and author of

7 Steps to Becoming Financially Free: A Catholic

Small Group Study

(OSV).