Your actions show what is important to you in life, and your financial life is no different. Whatever you think is important, whether consciously or subconsciously, that is what you will spend your money on. We can say we value investing or saving for the future all we want, but if we do not put those words into action then they are just wasted and mean nothing. Looking at how we actually spend our money can be an eye opening experience to your financial priorities.
What You Need to Know About Setting Financial Priorities
Your Checkbook Register Reveals The Truth
Your checkbook register tells the tale of the flow of money through your household. What do you spend your money on? Maybe a checkbook resister is not the correct document, maybe we need to just look at bank statements. But, either one will reveal what our financial priorities are. Of course, we will all have the normal fixed expenses of mortgage or rent payments, car loan payments, insurance premiums, and the like. The variable costs that change every month show our true feelings about money. Do you like to spend your money going out to eat every week? Do you leak money out of your monthly budget by trips to the coffee shop? What does your checkbook register or bank statement say about where your money goes and what you subsequently value?
What You Value Subconsciously
We all say that we put a priority on financial goals such as saving for retirement, paying off our homes early, or sending our children to college without saddling them with too much student loan debt. But, do we really value that? Many financial planners recommend saving 15% of your income towards retirement. Are you at that level yet? Are you needlessly wasting money on frivolous things without realizing it when you could be allocating that money to a better use? Many people do not even realize how much money we waste on everyday purchases. Paying with cash also has a way of having money disappear rapidly without a trace. It is not that we rob our retirement accounts or child’s college fund on purpose. We often do not realize that we short change portions of our financial goals for immediate gratification. It is only through looking at the tale of the bank statements that we really find the truth out about our spending habits.
What You Can Do To Set Your Financial Priorities
The first thing that you need to do if you haven’t already is to identify what your priorities are in the first place. What are your financial goals? Do you want to send your children to college and pay their entire tuition bill? Or, do you want to retire from the military after twenty years of service and not work another day in your life? Both of those financial priorities are doable if you plan. You need to have a written monthly budget that dictates where every dollar will go. This will help prevent those sneaky ones leaking out and not being allocated towards your financial priorities.
We do not set out to miss our financial priorities or goals. Many times we minimize our financial priorities without even realizing what we are doing. You can get your financial priorities back in order by focusing on them and ensuring that they are receiving the attention that they deserve. Actions speak louder than words in all things including our financial lives. Make sure that your actions reflect your priorities with money.