Goal and Priority Setting in Your Finances

Sometimes, when I look at the plethora of goals I have for my financial future, as well as the many times conflicting goals that I have for things like home improvement, self improvement, vacations endeavors, business endeavors and other various goals that your need money to reach, I wonder how I’m ever going to prioritize them so that they can all get done within a reasonable period of time. It is hard for most people to prioritize their financial goals and other longings, unless they happen to be a millionaire many times over (just being a millionaire these days doesn’t seem to quite cut it).

I figured out that my timeline for one of my major goals was going to be five years. This timeline is fairly doable, since it has to do with paying off our secondary mortgage, the one we got to make up for the downpayment on our house since we decided to use the money we saved up for the myriad of furniture we needed to furnish our new home, plus the closing costs, etc. that we needed to pay to get in the home, hookup fees and so on and so forth.

I set this as a priority because paying this loan off will allow us to refinance our primary mortgage, which will save us thousands of dollars in mortgage interest over the years. I had to use another factor to determine this priority, and that was the additional savings in interest, so this goes to show that sometimes you need to use other factors in your decision making when determining which of your personal goals involving money in one way or another should go above the others.

In order to pay the additional principle on the home loan, we of course had to forego other goals, like putting a deck on our home, so that we could save money first rather than building more interest upon interest since we would have had to take out a home improvement loan to get this done. Another goal that came in place over our deck and other home improvement desires was to pay off some lingering credit card debt by consolidating and paying off several cards at once. By doing this, we saved all that revolving interest over several years, which puts us in a better financial position for the future.

When you make decisions about your goals, try to prioritize based on what is going to save you more money over the long haul, or what is going to allow you to put more money away for your future or for emergency savings and things of that nature. If you’re making decisions solely based on emotion, like taking that 5k vacation to the Pacific, then you could seriously regret it in the near future. Things like vacations feel great while you’re on them, but if you’re neglecting things at home, then the tension will just still be there when you get back, trust me!