Budget Questions To Ask Yourself

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Overview

I’m a firm believer that no financial tool will get you from where you are to where you want to be better than a budget. But, for a budget to be effective, you’ll need to know where it is you’re trying to go. To know that, there are some budget questions to ask yourself.

The top five budget questions to ask yourself when structuring your budget are:

What are my priorities?
What are my short-term goals?
What are my long-term goals?
What can I change to better align my budget with my priorities and goals?
Can I sustain this plan long-term?

By asking yourself these questions before, during, and after budgeting, you’ll be able to evaluate how your budget lines up with your financial purpose to ensure you are on the path to success.

While these questions may seem fairly self-explanatory, I think they deserve a closer look. Let’s jump in.

Budget Question To Ask #1: What Are My Priorities?

In my “Building A Budget” series, I go into great detail about how to prioritize and organize your budget. The process I outline there represents exactly the way I organize and prioritize my personal budget. And I do believe every good budget will contain the categories I provide. However, you may choose to prioritize those categories differently.

You’ll need to read through that series, learn the key pieces of a well structured budget, and then evaluate how you personally feel they relate to one another.

I’ll give you an example. I personally prioritize (and recommend prioritizing) giving above debt reduction, even during periods of aggressive payoff. This comes from a personal belief that giving is one of the most important things we can do.

However, you may feel that you’d rather be able to give a lot later by getting rid of debt faster now. That’s totally up to you.

To best understand how to structure and organize your budget, you really need to take time to ask yourself, “What are my priorities?”

Read The “How To Build A Budget” Series

Budget Question To Ask #2: What Are My Short-Term Goals?

While the next two questions are related, they are still two distinctly different questions. It’s not enough to just know your goals in a general sense. You want to have an understanding of which goals are going to unfold over years of planning, and which you want to knock out fast. This is important because it will, again, help you prioritize your spending and savings.

Let’s take another example. When my wife and I found out we were pregnant, we knew we needed a new (to us) car. At the time we were two-door car people. That meant we suddenly had a short term goal of purchasing a four door car.

We established this as a short term goal, figured out what we could afford to save per month and the amount of time we had, and went to work. This is how you’ll apply this question.

By asking yourself “What are my short term goals?” you can better identify the types of cuts you need to make in your budget to help you get there.

Budget Question To Ask #3: What Are My Long-Term Goals?

Again, related to the previous question, you’ll want to identify your long-term goals.

These are the goals you set for yourself that you know are going to take years to achieve. But, if you don’t start taking small, regular steps toward those goals now, you’ll never get there.

An example here might be something as simple as becoming a millionaire. Don’t scoff. For many people, this is definitely an achievable goal if you start early and stay consistent.

My wife and I certainly hope to reach that goal at some point. Our plan to get there involves consistent, diverse investing over time. No high risk investing in the latest single stock that’s in the news, just consistency in the long haul.

Your long-term goal might be to pay off your house early. You may want to sit down with a good early pay off calculator and run out some scenarios to see what’s achievable. Based on those numbers, you can better plan your budget to make sure you are taking the correct steps on a regular basis to meet this goal.

Long-term goals take short-term planning. Ask yourself “What are my long-term goals?” now so that you can ensure you start moving toward those goals. That’s the only way to ensure you get where you want to go.

Budget Question To Ask #4: What Can I Change To Better Align My Budget With My Priorities And Goals?

Once you’ve taken the time to ask the first three questions and get your budget built, it’s time to evaluate. You know what your priorities and goals are, but are you maxing out your budget potential? That’s what this question seeks to address.

You may look at your budget and see that even though you prioritized saving for your children’s college fund, you’re not actually going to reach the goal amount you have in mind at your current rate of savings. Meanwhile, maybe you’ve given yourself a lot of extra padding in your food budget, which you decided was a place you could probably cut back.

Now you have the opportunity to make a change to better align your budget to your priorities. Shift some money out of food and over to the college fund.

The truth is that many of us say we have one set of priorities, and live with another set of priorities. I’m very guilty of this at times. By asking yourself “What can I change to better align my budget with my priorities and goals?” you can help hold yourself accountable to the answers you gave in questions one through three.

Budget Question To Ask #5: Can I Sustain This Plan Long-Term?

At the end of the day, it doesn’t matter how good your budget looks on paper if it can’t be executed in the real world. That’s what we want to address here.

Now I’ll say this, if you are in a period of aggressive debt pay off and working the Debt Snowball or Debt Avalanche, then your budget is not intended for the long-term. That’s fine. You just need to know you can get by until you finish that journey.

For anyone past this stage or bypassing this stage, you need to know that the budget you’ve outlined can be sustained. Obviously every month is different, and you’ll be tweaking as you go. But, take time to evaluate whether or not you and your family can live comfortably on the basic structure of the budget you’ve created over the long haul.

While it’s great to establish goals and priorities and shift your money within your budget to better target those things, you must take time to ask “Can I sustain this plan long-term?” or you may find yourself giving up your budget all together.

Conclusion

And there you have it, my personal budget questions for success. These are the questions my wife and I regularly address when we sit down to create or evaluate our budgets, and we have found great success through asking them. I hope you’ll be able to say the same.

Again, the top five budget questions to ask yourself when structuring your budget are:

What are my priorities?
What are my short-term goals?
What are my long-term goals?
What can I change to better align my budget with my priorities and goals?
Can I sustain this plan long-term?

And remember, regardless of your money goals, you can “Bank on a Budget” to get you from where you are to where you want to be!

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Alex

Hello, my name is Alex! I'm a public school teacher who has achieved some big financial goals just by getting control of my money using some simple strategies like using a monthly budget. Now I'd like to share what I've learned with you. Welcome to "Bank on a Budget!"