Creating a Budget: What is Your Why?

When we mention that we’re debt free, or talk about big saving plans, or want to buy a house with cash, one of the first questions we hear is, “Well, how do you do it?” Most of the time, people are actually asking about the budget. “How do you make it work?” “How do you save money when life just has a way of being expensive?” “How do you budget for unexpected expenses?” These are all great questions and I’m going to try to address them in the next couple of blog posts, but there’s one question that people aren’t asking and I think it is the most important one. For you, for us, for anybody who has any desire to practice stewardship of family resources.

That question is “Why?” It sounds simple, but as you really get into the nitty gritty of it, answering this question can give you the impetus to achieve your goals. Caveat: if you are married or engaged, this is not a solo sport. Since I am married, a lot of what I write is targeted to couples, but I think it is mostly applicable to single people as well, the main difference being that it is entirely up to you. In a marriage, if one spouse or the other is not on board, it is going to be a tough, very frustrating row to plow. You need to be able to discuss money and budgets without getting upset with each other, and everything within the budget needs to be open to loving, discerning debate. We’ll get into this more later, but for now, start talking!

Set your long-term goals with your spouse

There are two types of goals you need to set: calculable goals and life goals. The calculable goals are things with actual numbers. They might be a house, or a down payment, or retirement investments, or paid off debt. These are the easy numbers. Once you have those material goals, you need to ask yourself why you want them.

Why is this important to you? How will accomplishing this change your life? How does it improve your relationship? What do you imagine life looking like in 5 years? 10 years? 25 years? What else can you achieve when you’ve hit your first long-term goal?

This is the best part of budgeting!

This is where you get to dream of the future, and sketch out a plan of what your ideal life looks like. You’ll start filling in the blanks of how to get there soon, but it is SO important to have these goals be solid and feel real. This plan is not something that is going to change everytime the new iphone comes out. These goals are going to live with you until you achieve them.

Our first calculable goal was to save enough money to buy our first house in cash. That’s a big goal, and it’s fantastic if that is your goal too. But that wasn’t the end for us. Way back when we decided we wanted to buy a house in cash, we decided WHY we wanted to buy a house in cash and we built our larger plan around that why. Our ultimate calculable goal is to own enough investment properties that our entire income can be passive income. But again, the WHY is the most important part of that. Without a why, that is just a random collection of words on paper that sounds arbitrary and materialistic.

Josh and I have these goals because we want to have the freedom to enjoy each other and our kids while they’re young. We want to be able to home educate them and travel the world together, and develop these precious relationships while we have them so close to us. When we seen needs, we want to be able to be generous with our time and money. So our calculable goal is there but it is entirely dependent on our life goal behind it.

After you know your why, you can get busy achieving it.

Once you have established all the why and because behind this budgeting goal of yours, THAT is when you are really prepared to commit to the work of budgeting. It is important to know your purpose behind it–you will very quickly find out that it is not easy. Budgeting for big goals is a whole lot more “no” than “yes. You’ll say “no” to a lot of things that sound valuable, entertaining, and desirable. The only way you’ll be able to do that is to have a vivid end-game that is worth it to you.

Your goals may be entirely different than ours, but that doesn’t matter. This is about budgeting as a tool to achieve those goals, whatever they are. Maybe it is most important to you to save enough in an emergency fund so that in case of a job loss or layoff, your family is fully funded for 3-6 months. Maybe you want to buy a house, or save for a down payment on a house. You might have a goal to travel, or start your own business, or invest as preparation for retirement. If you have your calculable goals and your why, then you are ready to tackle the actual work of making a budget to help yourself achieve them.

I have never done this before, so please bear with me if it doesn’t work properly at first. I’ve created a free budgeting tool for y’all, all about finding your why. As we work through this series on budgeting, I’ll be sharing more free worksheets and tools (as long as I can keep up with the technology side of it, haha) You can sign up for it here.