5 Tips to Prebudget

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Budgeting is somewhat of a buzzword right now. People are freaking out about getting your personal budget in order. To be fair, they’re right (as much as it kills me to say that the proverbial “THEY” is right). But “THEY” are missing a few key aspects of the whole personal financial systems. There are some requirements to be able to effectively create and follow a budget. Most people gloss over this “prebudget” aspect, but prebudgets are almost more important than a budget. If you don’t have a good foundation, the house will crumble. The same goes for personal finances. So sit back, relax, and check out the 5 tips to effectively prebudget.

Know ThyselfKnow Thyself to Prebudget

The first thing you need to prebudget is an intimate knowledge of yourself. I know that sounds strange but without a real hefty amount of self-awareness, you aren’t going to go anywhere. When we aren’t aware of our own weaknesses, strengths, defects, or predispositions we are at risk of being attacked by our own self-destructive behaviors. For a fledgling budget-keeper, this could be GAME OVER. This concept is illustrated by the story of McArthur Wheeler. In 1955, Mr. Wheeler decided to rob two Savings Banks in Pittsburg. Being an intelligent, self-aware person, he smeared lemon juice on his face. His theory was that lemon juice made invisible ink messages, so therefore it would also make his face invisible. NOPE! Mr. Wheeler was arrested the same day. He couldn’t believe that it hadn’t worked. Sometimes, we find ourselves in situations where we too have lemon juice on our faces, metaphorically. This also means that you must systematically look at your motivations. You will need to find the “why” that pushes you to keep the budget. If you don’t know why you are budgeting, then it won’t matter what your budget looks like. So know yourself! Don’t be ashamed, just know yourself.

Commitment and Intention

Now that you have self-awareness, you need commitment and intention. These two are very closely linked. You need to commit to your budget long before you even build it. You need to understand that you will have to make sacrifices. You can’t say yes to everything. If your friends ask if you wanna catch a movie, but your budget says no, then you will have to say no. When I say that you need intention, this means that you can’t just budget and save passively. Doing so may work for a season, but eventually, things will get away from you. No, you will have to do things on purpose. You will have to consistently take action for your own personal reasons So get committed and do things on purpose.

Understand Money

Understand Money to PrebudgetYou then need a real understanding of what money really is. Too many people think of money in terms of an object, as a real thing. Well, I’m sorry to burst your bubble, but money is nothing more than a symbol. Money represents exchange. In that sense, it represents two things at the same time. If I work at a job and get paid $10, that money can be thought of as the value I put on my time and energy, and the value my boss puts on the work I accomplished. I then go buy a $10 cookie (I know, super expensive) and that $10 represents a cookie in my eyes and the patronage of a customer in the eyes of the cookie vendor. Why is this important? If you don’t understand that money, when it comes down to it, is based on the commodities of personal time and energy, you will treat it differently. You’ll question some of the things for which you spend money. You will question how you spend your time. The understanding of money will change your whole financial paradigm. So understand money.

Educate Yourself

There is a very specific reason that we only get surgeries from doctors. It is because they have spent countless hours reading, studying, memorizing, practicing, and learning (we hope) how to successfully perform surgery. They have education and practice. To correctly budget, a good education is required. I don’t mean a degree or textbooks or worksheets or teachers. In fact, the public school system has generally done an atrocious job teaching financial intelligence. I mean real learning. You need to find the true experts and really take and apply what they teach. Read all of the books you can. We here have learned from many different sources (including Renatus) about finances. We are constantly learning as well. **BIG DISCLAIMER: From our personal studies (books, podcasts, blogs) we’ve seen that there are so many financial fallacies out there. Anyone who can spell can put up a blog or a book and be deemed an expert… including US! With every single tidbit of information, test it, try it, think it over, and criticize it against your personal ideals and truths. What works will work consistently when correctly applied. Don’t just trust the world wide web….**


Prioritize to PrebudgetYou will NEVER reach financial freedom without being able to correctly prioritize. You will NEVER be able to keep a budget if you don’t prioritize. You will fail your prebudget if you can’t pick what is most important. If everything has equal importance than nothing is most important. You might ask yourself the following questions:
  • Is it more important to pay off debt or invest right now?
  • Do I want active investing (like real estate) or passive investing (Like stocks)?
  • Do I want to keep my lifestyle relatively the same as it is?
  • Am I willing to try and earn more money?
  • What are my long-term goals?
  • When do I want to retire?
  • How much is my debt costing me?
These are just a few questions that should help to put you on the right track to be correctly prioritized. Figure out what is most important, and then throw everything at that. You have to be strategic in this because what you want most out life won’t always be what you need to focus on right now. Look at the numbers and think objectively and then GO, FIGHT, and WIN!

Ready. Set. PREBUDGET!

Now you are ready to go and get some! Ok, not really, but you are ready to go prebudget, and then budget. Put these tips into practice and go crush it. Systematically shred your specific money goals and actually feel free for once. Think of the people you love and share this article with them if it helped you. If you have any more suggestions comment below and we’ll probably add them.

Justin Lewis5 Tips to Prebudget

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