We not only make choices about where to spend our money, but we are also forced to make decisions about what is more important to us. Should I buy this or that? If I buy this, I won’t be able to get this. While I bet we all had enough money to do whatever we want, most people are bound by our finances. There is a limit to the number of bills in our wallet. Whether you like it or not, you have to prioritize something.
Common Examples of Financial Priorities
There are many common ways that we establish priorities with our personal finances in our everyday lives. People often talk about these in extreme situations, but it doesn’t have to any large financial sum or in worst case scenario.
In the movies…
A popular version setting financial priorities comes from the movie, “John Q”. If you aren’t familiar with this movie, it is about a lower-income family struggling to make ends meet when the son has heart failure. John, the father, is forced to come up with the cash for a surgery since he doesn’t have adequate insurance. He makes many choices that directly involve his finances, making his son’s life the clear priority. Before his son was ill, John made the choice to keep the electricity on instead of paying the car payments on the second car. After his son is facing death, John starts with selling his stuff. His son’s life means more to him than his material possessions. He gets donations from the church. He even takes people hostage in an effort to save his son’s life.
In real life…
It’s not that rare that we make these type of decisions. Instead of buying a second car, my wife and I spend that money on a vacation (and have money left over). Saving money for retirement is more important than having the latest gadgets or biggest T.V. Living in a safe neighborhood is more important than saving hundreds of dollars on rent. I could go on forever, but I think you get the point, which is, that you face decisions everyday. Big and small. We are forced to prioritize how we spend our money. What is most important should be that which we direct our money. Is this the case?
What Your Financial Priority Should Be
While it is hard to establish everyone’s priority (because everyone’s situation is different), here are some important things to consider.
Safe Home – Having a roof over your head, a bed to sleep in, and place to relax seems like one of the most important things to me. I would hate to be forced to live on the street or in a neighborhood where I was afraid to go outside.
Retirement – Considering that too many people do not save enough money for retirement, this should be a priority for everyone. With the uncertainty of social security for young adults and the rising costs of health insurance, I bet it is difficult to save too much. Making retirement a priority now will go a long ways to alleviate this need later in your career. Invest now while you have time.
Health – Staying healthy is one of the things that keeps coming up in my life. Whenever I spend time with older family members, I can’t help but be reminded of how important it is to take care of your body. I want to live as long as possible and would hate to regret not doing enough to stay healthy.
Memories – I also don’t want to grow old and regret not doing enough things. I don’t want to live my life in front of the computer or T.V., but instead want to travel to exotic places, enjoy close friendships, and live life to the fullest. Many people wait until retirement to enjoy the things they care about most. I don’t want this to be me.
Things that Should not be the Priority
While it is always hard to say what your priority(ies) should be, it is much easier to point out things that you should avoid.
Stuff – While I enjoy having nice things like anyone else, this should not be the priority. If getting the latest gadget or newest car causes you to sacrifice other more important things, something is wrong. We all know that cars are destroying society in more than one way. Why feed the fire?
What’s Your Financial Priority?
Whether you realize it or not, you value certain things over others. As a result of our limited finances, we often are more willing to spend money on the things that matter more to us. In the same way that I am willing to pay a few extra hundred dollars in rent for a comfortable place to live, others choose to have a second car over a nice vacation or college fund for their child. You can’t have everything and you must make choices.
If you are uncertain as to whether you have the correct financial priorities, start asking yourself if you will regret making the choice that you are and whether there is something better that you could be doing with your money. Are you making the best decision?