Are You On Track? Reevaluating Your Financial Priorities
Crash Course in Financial Flexibility
Our lives are complex, and that’s usually a good thing because it keeps life interesting. But when it comes to our money, the more complex our situation, the more challenging it is to manage competing priorities.
What’s the Opportunity Cost?
We suspect you have more than one thing you want to do or accomplish. Each dollar can only do one thing (that’s called an opportunity cost), so you must be ready to decide which is most important when your priorities shift, even if only for a short period of time.
Make a list of everything you want to do that requires money, set a dollar amount and a date (sound familiar?), prioritize the list, and set an amount to save for each goal.
|Financial Priority||Amount You Need||Date|
|Vacation in Costa Rica||$3,500||12/2018|
|Stuff that comes up||Not sure||No idea|
Life will continue to happen. You may have new savings goals or changes in your life or your income. When new opportunities or challenges arise, look at them in the context of your existing goals and decide how to allocate your money. Your priorities are not always fixed and you may need to be flexible. Remember: your list is a guide, not a straight-jacket.
Keep this list handy so you can always remember what’s important to you and what your savings goals are.
Saundra Davis is a nationally recognized financial coach and educator. Her experience in the U.S. Navy, where she made every money mistake possible, and her 20 years serving community-based organizations led her to the reality that the best way to help people find a path out of poverty is to help them become their own financial expert.