3 Questions to Ask Before You Start a Budget
Tags: Self Improvement, Money, Budget, Finance, Planning

Photo by Kelly Sikkema on Unsplash

There’s a lot of information out there on how to create a budget. A quick internet search will give you everything you need to start tracking your personal finances.

But jumping straight into creating your budget isn’t the most effective way to create lasting financial change in your life.

A more effective, lasting approach requires you to take a deeper look. You need to start somewhere before the numbers. Before you even check your bank account, you should ask these 3 questions:

1. Who do you know that handles finances the worst?

A good place to start is knowing where you don’t want to end up. Most of us know someone who doesn’t handle money in the wisest of ways. And it actually pays off to pay attention to what they’re doing.

Make a list of all the ways you think this person handles money poorly. Of course you can’t always know someone else’s finances, it’s okay to guess here. Maybe it’s the excess coffee drinks or new clothes. Naming specific behaviors or purchases can clue you in to areas you might be doing the same thing. The benefit of actually listing out real, practical examples of poor ways of using finances can bring clarity. It’s easy to know in theory bad ways of handling finances, but having a tangible list of real examples is another level of enlightenment.

In addition, an image or impression an actual person gives off is very affecting. So imagining a lifestyle you don’t want of someone you know or don’t know can leave a lasting impact and motivating impression to push you in the direction you do want to go.

2. Who do you know that handles finances the best?

Speaking of knowing where you want to go, it’s helpful to have a concrete example. This one can be more creative as well because it can look very different based on what is important to you.

Choose a few people, both people you know in your own life and perhaps some famous people as well. The idea here is to analyze how people you respect handle their finances. Again, you won’t know specifics but you can make a lot of guesses. The act of very specifically writing out practices of handling finances can hit your mind on a deeper level than just trying to willpower your way to financial success.

Do they invest? Do they schedule time for budgeting and planning out their finances? This is why it is good to choose a few types of people. The ways in which we handle finances might look different depending on the amount of wealth. The way you handled finances when you got your first job looks a bit different than how you handle them years and many jobs later. Picking a few examples and writing out how they handle finances based on different income levels can give you guidance on how you would like to handle finances as you progress along.

3. If you had all your needs met, what ways would it be fun to be generous?

The final important question to ask before you start your budget is about being generous. I highly encourage you not to skip over this one. Holding too tightly to your wealth is a sure-fire way to be more stressed and anxious. Generosity is a freeing sort of feeling. Being able to pour out into others needs is absolutely filling.

The trap here is that so often we plan to be generous later. We fixate on some future destination when we have enough to go around how we might use it. Maybe we imagine how we would be generous if we were milionaires. And being able to be generous with a lot is powerful and impactful, but being generous with a little still has profound impacts. There are a lot of people who are trying to make ends meet and an extra $30, $50, or $100 could make an enormous difference.

Before you start your budget, brainstorm ways you would want to be generous. Maybe you don’t know if you even have an extra $5 to your name yet. Maybe you can’t make ends meet at all — still don’t skip this part. If you don’t list out ways you can give when you one day have enough you might forget when you get there. Be intentional with your wealth and choose to leave a legacy of something bigger than you behind.

Now go start your budget

After you have a good idea of where you don’t want to go, a good idea of where you do want to go, and a list of ways you can uplift those who come after you, it’s time.