To set financial priorities, having organization is indispensable. But calm down, there are tips and methods that can help with this mission.
Searching for an app to save money , for example, can be a good way out if you already have a defined goal. The better your financial organization , the easier it will be to handle money.
We prepared this guide to help you in this decision-making process and habit changes . To have balance, you need to know where you’re stepping. So understand how to set financial priorities and start making dreams come true!
What are financial priorities?
Priority is a feminine noun that means “quality of being first ”. So, what comes first in your life when it comes to finances? Financial priorities are the expenses that are at the top of your list!
Those obligations that you consider most important and that cannot be forgotten or removed from your list of essential accounts. You must be thinking about water and light bills, for example. Exactly!
But those aren’t the only things on the priority spending list. Therefore, it is always important to think hard about how you control your income and within your payables, which of them are expendable.
To understand how important this concept is, keep following this post and learn why setting financial priorities is linked to the financial health of the whole family!
Financial health and priority setting
Keeping the budget balanced is not an easy task, but it is not impossible! Through small changes in spending habits, you’ll be surprised how organized your finances can be.
If you want financial success , start by organizing a financial priority list. Will answering these questions help?
– What are my greatest basic and emergency needs?
– How can I achieve financial success short-medium-long-term?
Basic needs are the priorities that are easy to identify and we have already mentioned: paying off the water, electricity, internet bill (this may be essential if you work from home).
Financial goals are the items you hope to accomplish. The dream of owning a home, the dream car, the children to come or a peaceful retirement . Don’t forget about the long term! The future will pass anyway, so make it work in your favor.
Put everything on paper, spreadsheet or app. Which of the items can wait and which cannot? Or better yet, which ones require you to start saving and investing today in order to make them a reality in the future?
Plus, which of the listed expenses are unnecessary and can be eliminated (or reduced) in favor of a larger goal?
3 steps to setting financial priorities
Having a financial plan is your main tool when it comes to prioritizing. Next, you’ll understand how some steps help you maintain personal finance health.
1. Understand how your financial life is today
If your financial life were a book, how would the words be arranged? What would be the status of the pages? How would you feel opening it? Even if the vision is not excellent, the important thing is to start getting organized!
Knowing the destination of your monthly income is the basics to start understanding how to achieve your goals.
Check which are the financial bottlenecks where your money is draining and stop this leak immediately. The amount of snacks during the week, going out with colleagues from the firm, what can change?
Be aware of what is happening in your financial life. Write down all expenses and sources of income. Define categories. How much do you spend on shopping? And in transport?
In the end, you have a monthly report of your expenses, you can identify your mistakes, successes and financial priorities.
2. Organize your accounts in order of importance
Now that everything is “in the clear” and only what is important and necessary is left, you can make decisions more coherently. Define your expenses, needs and goals in order of importance and set deadlines for achieving them.
It is important that these financial priorities are also purposes. If you think this way, you are more likely to stay focused and in a very short time, start to realize your life goals!
3. Collect money and invest
Organized finances, defined financial priorities and written objectives. Time to collect money, but that’s not enough. Standing money loses purchasing power, you need to invest.
