What Comes First in Financial Priorities?

Taking advice from financial experts can be a mixed bag.  Some espouse the belief in getting out of debt as fast and soon as possible, while others are more focused on building wealth at the same time as managing debt and reducing it in a manner similar to building up your retirement account.  Whichever philosophy you ascribe to, understand that priorities of focus in managing your money must include a prioritization of important tasks that can help you get where you need to be financially.  Here are some general priorities that you must incorporate in order to assist you on your journey to financial contentment.

Save for Retirement.  If you have not started this process, keep in mind that the longer you put it off, the more you will have to make up for it later.  Saving for retirement is a mandatory task and no longer optional.  But no one can make you do it; only you can motivate yourself and start building up wealth into a 401k or IRA which will be there for you when you get to retirement age.  If you are young, consider it a necessary expense, just like rent or a car payment.

Get Rid of Credit Card Debt.  Take the steps necessary to eliminate credit card debt which eats up your money every month and throttles your financial options.  This means cutting up cards, paying off the balances and closing the accounts.  Total destruction of this type of debt will free you to do better things with your money, like saving for a house (once your credit is good) and paying for college.

Build Up an Emergency Fund.  Three to six months is the going amount for an emergency fund.  This will be your ‘credit card’ in paying for life’s unexpected events.  Once you build up the fund keep it built up after you have used it by replenishing those dollars.

Once you implement these priorities the rest of your financial needs will fall into place because you will find it easier to plan for the purchase of a car, or home, the funding of a vacation or other expenses that require planning in order to pay for over time.

Put your Finances on Autopilot.  One of the best and easiest ways to make these priorities happen is to make them occur automatically by having money from your paycheck automatically diverted to a bank account from which the funds for these items are pulled automatically as well.  It is the best way to handle these items because you never see and miss the money.  It is performed with no intervention on your part.

Stick to Your Plan.  Once you have your financial priorities set, then stay with them for the long term.  You will be amazed at how quickly the money builds up and begins to form the foundation for your wealth building strategy.

Celebrate Your Freedom.  You need to feed off of the feelings of contentment by having your priorities in place and your plan working to perfection.  There are few things in life that can fully bring you to the point of contentment like being in control is able to do for you.

Realize Your dreams.  Once your money is working for you, the opportunities that come along which help you achieve your dreams of home ownership or other ventures can become a reality.  It is not how much money you assign to these tasks as much as it is the consistent, long term activity of doing it that will work for you.  Make priorities and stay with them.

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This entry was posted on Saturday, May 2nd, 2009 at 5:01 am and is filed under Debt & Consolidation, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.