Making The Most Of Your Money

5 Steps To Prioritize Your Financial Goals

7 September 2019 by Glen Robinson

When you meet with a financial planner, you will need to address one of the most fundamental questions about your future: what are your goals? While this question seem simple — and most Americans could easily rattle off a variety of financial goals — it's harder to determine how to prioritize and reach those targets. 

How can you find the right priorities? Here are a few steps to success.

1. Stop the Bleeding. The most immediate financial goal should address current crises that threaten your ability to continue a normal life or to avoid further expenses. Paying down the highest interest debt, for instance, or preventing repossession is key to creating a stability you need in order to move on. Before you can heal your overall finances, you'll need to stop the current bleeding. 

2. Save in the Background. Just because you're concentrating on more immediate needs doesn't mean you should stop all work toward the bigger picture. Put some savings for future goals on automatic deposit so you continue to make a minimum of progress. Automatic saving allows you to stay focused on the important things while keeping at least a little momentum toward the future.  

3. Build a Buffer. Once you take actions against the most immediate crises, start building a monetary buffer of savings. This step allows you to begin planning with the future in mind rather than focusing on the present. The size of your financial buffer depends on your expenses and income situation. The more stable your earnings, the less you need in order to prepare for an emergency.

4. Start Short-Term Goals. Some goals — like retirement or college savings — will take a long time to see fruition. These are important, but they lack the immediate results that new savers often need to see. Set some short-term goals you can reach within a year or two. This could include a savings goal, paying down a certain amount of debt, getting needed home repairs, taking a vacation, or getting a month ahead on bills.

5. Draw Up Long-Term Goals. With shorter-term success under your belt, start thinking on a longer horizon. This is the time to more seriously entertain your large financial goals — things like home ownership, starting a business, achieving retirement targets, or moving. Give each goal a proposed timeline — perhaps 5, 10, or 20 years — and a firm plan as to what it will take to reach it.  

Need help naming and prioritizing your specific goals? An experienced financial planner can be your biggest asset. Look for a fee-based financial planning service that fits your personality and saving style. Then, call for an appointment today to get moving forward. 

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