Money Compass: How To Set Financial Priorities

by | Jul 24, 2012 | Personal Finance

Your Compass To Financial Planning SuccessBeing conscious about your finances and setting goals for your money can help you achieve your dreams at any stage in life.

Here are some helpful tips to remember when you are making plans for your money and setting your financial priorities:

Identify Your Goals

Remember that you can do anything you want with your money, but you can’t do everything you want.

You will never have the unlimited resources to achieve all of your goals, so focus on which goals are most important to you and concentrate your efforts on those.

To accomplish these most important goals you will need to put some of the other less important ones towards the back burner.

What is Important to You?

When you are thinking about how you will manage your money, consider the things which are important in your life.

You will likely want to have an emergency fund to bail yourself out if the unexpected occurs. You also might want to free yourself of debt, or contribute to your child’s education fund.

Rank these goals in order of importance to decide which you should focus on primarily.

Talk to Your Family Members

When you are making a financial plan, it is important to involve all of your family members in the decisions.

The way that you manage your money will have an impact on everyone in the family unit including your spouse and your kids.

Make sure that you are involving everyone in the goal setting process and that they are getting their say.

Use Compound Interest To Take Advantage of Time

When you put your savings away in an interest earning account, the younger you are the better.

Over the years your nest egg will grow, thanks to the power of compound interest which will have you earning interest on your interest!

So no matter how old you are, start now because the earlier you start saving, the more money you will have!

Re-examine Your Financial Strategy

Your financial priorities will change throughout your life as you go through different stages, such as buying your first house, having a small child, sending your kids to school and moving towards retirement.

Every few years or so, it is important to sit down with your partner to make a new budget which will reflect your current stage in life.

With these planning tips, you will be able to budget your money and achieve your financial goals all throughout your life.