Before You Set Up Your Budget (Plus Free Printable)

Setting up a budget is a huge part of getting your spending under control and outlining your financial future. Budgets are a great tool and I highly encourage everyone to utilize them. However, there are some important steps you need to take before you set up your budget. I’ve discussed tracking spending, and today I want to explore another key step in the process.

I’ve been working on improving my spending for many years. I’ve set up a budget, tracked my spending, and automated my savings. Despite all of these steps towards creating a better financial future, I continued to notice some strain. I had to reflect on why my spending was the way that it was at the time. I needed to explore my pattern of spending. I thought it had to do with where I was at the time. Honestly, I didn’t even think to look at my history. Exploring your financial history can be a key part to creating a successful financial future.

My Financial History

I grew up surrounded by financial strain. My parents spent several years of repaying significant credit card debt. After that was finally paid off, my parents purchased a new home. I honestly don’t know if my parents even paid that home off before they purchased my grandparents’ home after my grandmother passed away. After we moved into that house, I remember a noticeable change in the financial situation of my family.
During my teenage years, I had to pay for both of my driver’s education course, all transportation expenses (including a monstrous repair cost when my vehicle’s timing belt broke on two different occasions), and I had to pay our electric bill after it was cut off several times throughout high school. I had anxiety returning to my home after school and being afraid our power was off again.
While working in high school, I honestly felt I could never get ahead. Every time I got any sort savings, another expense would arise and my account would go back to zero. That is an overwhelming, frustrating, and depressing pattern. When I left home for college, I noticed a change in my finances. I worked two jobs and received financial aid, which allowed me to save some money during my first year of school. I noticed I started to spend a fair amount of money. When I look back on this experience, I realize I was spending money because that wasn’t something I could really do prior to this time.

My Reality Check

Obviously, I spent some time soul-searching about my spending habits and my past. I had to be completely honest with myself and a realized that growing  up with significant financial strain has affected my spending habits. Being honest with yourself is not always comfortable. I was way outside of my comfort zone while I was examining my past. I don’t like to think about it because it was painful and terrifying. Eventually, I was able to come to terms with the fact that I had a rough financial childhood and it continues to affect me to this day.
The important thing I focus on is that I am able to recognize how my past plays out in my current spending, so I am able to slow down and ask myself the right questions, such as “Do I really need this?,” “Am I just trying to spend money?,” or “Is this me being impulsive?” With these questions, I am better able to keep myself in check and change my behavior. Now when I create my budget, I keep my history in mind.
I’ve included a free printable to help you explore your financial history. I hope you find it helpful!

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