What You Need to Know in Setting Financial Goals and Priorities

What are your financial goals and priorities?  Many people dream of debt free day, or just think about getting their budget balanced as soon as tomorrow.  Others have goals of paying for their children’s college education and some just want to help their children avoid the same spending mistakes they did.

I often think about financial goals because knowing your goals and priorities is the foundation of every plan.  Think about it.  If you don’t have goals it’s difficult to determine spending decisions in your monthly budget.  Is your immediate goal to pay off debt or save for emergencies?  Without clearly establishing priorities you may not make the best spending or money management decisions towards achieving those most important goals.

CNNMoney.com provides Money 101 lessons and Lesson 1 discusses, you guessed it, setting financial priorities.  Here are 10  things you should consider:

Setting Financial Goals and Priorities

Financial Goals and PrioritiesNarrow your objectives - Decide on the goals that are most important to you and your family.  Keep in mind that goals will differ based on your situation.

Focus first on the goals that matter – You can’t work on every goal at once.  Take the time to prioritize them and choose to work on the most important goals first.  This is key so you don’t become overwhelmed.

Be prepared for conflicts - When goals conflict (you’re not sure which to tackle first), I personally recommend considering the priorities Dave Ramsey sets in his Baby Steps.

Put time on your side - If you’re consistent over time in your savings and investments they will grow.  The same could be said with following your plan to get out of debt.  The takeaway for me on this is to be patient.  Follow your plan and believe you will succeed.

Choose carefully - Choose the goals that matter the most to becoming a better financial steward and building financial security for your family.

Include family members - Take the time to plan your goals with your spouse.  My wife and I try to sit down and review our big goals at least once per year.

Start now - There is no better time than now to start managing your money wisely, setting goals and building plans to achieve them.

Sweat the big stuff - Keep your goals in focus and consider other options.  For example, if a large vacation may take you off track from paying off debt. Look for a less expensive way to relax.

Don’t sweat the small stuff - It’s okay to have some spending allocated for fun as long as you take your goals into consideration as you make spending decisions.

Be prepared for change - Goals may shift as stages in life change.  For example, we’ve learned there are plenty of expenses associated with having young children.  As the children grow older the types of expenses change as well!

Final Thought

If you take away two things from this article, I would suggest setting the time to plan you goals with your spouse, if married, and start now.   Schedule time this week to list your goals and prioritize them!

Can you think of other things to consider when setting your financial goals and priorities?

About Jason Price

Jason Price is a family man saved by grace, passionate about faithful financial stewardship (1 Cor 4:2 NIV), soccer and the Pacific sun.

  • Randal

    these are all true, I like to prioritize my financial goals by earnings.. Example, paying off credit card debt, paying in to my matching 401k, and saving for an emergency fund then put it in a CD later. This way I am getting something back form my goals overtime increasing my income instead of buying that new car or football tickets at the top of my prioritys list which will bring in no additional income.

  • http://www.onemoneydesign.com/ Jason Price

    Randal, thanks for the comment. I tend to follow the Crown Money Map (Dave Ramsey Baby Steps work too) when setting priorities. They seem logical to me and definitely address the return on investment you mention. Good luck on your financial goals this year!