Reaching Financial Goals: How To Appropriately Prioritize

financial goals

I want a new car. A sleek, clean, energy-efficient wonder. But I’m not letting myself buy one – yet. Why? I have financial goals that are more important – more pressing – than my desire to ride in style.

A few things must happen within a person’s psyche before they will give up immediate wants for long-term needs. I detail them below:

1. Vision of the future.

People must be able to appropriately calculate where they were to end up if they stayed on the same old financial path. If they continued in their misbehavior: not saving, not investing, not dumping debt . . . where would they end up? More importantly, if they ask themselves where they want to be in the future, this might conjure up images what it would be like to be financially secure. How does one get to that point?

2. Getting mad, zealous, and passionate

Change only happens after a vision is realized and people get intense about accomplishing their long-term goals. This isn’t a passive attitude – hoping that everything will turn out alright in the end. This is a proactive attitude, something that compels a person to achieve unparalleled success.

3. Action in the midst of opposition

Having a vision and being passionate is not enough. In the end, it’s the things people get done that truly matter. Actually putting a game plan together and acting on it will accomplish much more than simply dreaming. They must do something.

Perhaps you’ve found your vision for the future. You want to retire wealthy. You’re zealous about achieving your goal, and you’ve even put some steps into action. Great! Now comes one of the most difficult questions: how do you prioritize your financial goals? What is the correct order of actions to get you where you want to be?

Breaking Down How Two Giants Prioritize

To answer this quandary, let’s consider two very popular methodologies for prioritizing financial tasks: Dave Ramsey’s 7 Baby Steps and Crown Financial Ministries Free Money Map.

Let’s start with Dave’s baby steps. Here they are listed below:

Let’s simplify this down to the basics:

  • Step 1: Save some.
  • Step 2: Eliminate smaller debts.
  • Step 3: Save more.
  • Step 4: Invest long-term.
  • Step 5: Invest in education.
  • Step 6: Eliminate larger debts.
  • Step 7: Invest short-term (5 years or more) to long-term and give.

There seems to be a balance between saving, eliminating debt, investing, and giving. Let’s take a look at Crown’s Money Map:

  • Destination 1: Budget and save $1,000 for emergencies.
  • Destination 2: Pay off credit cards and increase savings to one month’s living expenses.
  • Destination 3: Pay off all consumer debt except home mortgage and increase savings to three month’s living expenses.
  • Destination 4: Begin saving for major purchases, retirement, children’s education, and starting your own business (if desired).
  • Destination 5: Buy affordable home, begin prepaying home mortgage, begin investing wisely.
  • Destination 6: Home mortgage paid off, children’s education funded, confirm estate plan is in order.
  • Final Destination: Retirement is funded, free to be more generous with time and money.

Let’s also simplify these destinations down to the basics:

  • Destination 1: Plan and save some.
  • Destination 2: Eliminate some debt and save some more.
  • Destination 3: Eliminate more debt and save even more.
  • Destination 4: Save for present goals and future goals.
  • Destination 5: Buy home, start eliminating larger debts, and begin investing.
  • Destination 6: Eliminate larger debts, ensure investment in education is complete, confirm estate plans.
  • Final Destination: Ensure retirement is set, give like never before.

See the pattern here? Both methodologies start with small goals and move toward larger goals. In other words, they start with the foundational areas of finance and move toward more complex tasks. It’s obvious that both agree people should only splurge on large purchases after all non-mortgage debt is paid off and the emergency fund is built.

That’s why the car can wait. I want to build a firm foundation before purchasing discretionary items.

How about you? What major financial goals do you have that you’re wondering how to prioritize? Let us know in the comments below!

Photo by The Tattered Coat


















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5 Comments
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  1. A situation like this came up just yesterday for my wife and I. Our bathtub needs to be replaced but it is not the highest priority for us right now. More important to us is getting the first of our two car loans paid off.

    A salesman came to our house yesterday to show his company’s product. It looked great and would be exactly what we need for the bathroom, but it was over $8,000. With our car loan at under $5,000 we want that to be paid off first. The salesman mentioned that most people finance but there is no way we are financing anything ever again other than a house.

  2. Really it is a matter of self-control. We might be able to purchase the new car (or any other item) immediate, through the use of credit, but that is not the prudent thing to do. Self-Control tells us to wait. This is a good reminder that money is a spiritual manner.

  3. I can’t agree more with being passionate and proactive about the future. The thing that bothers me the most are my friends and co workers who don’t care at all. I care about myself and my future and want it to be a good one. They don’t seem to think their own future is in the works by what they are doing now.

    Just getting started is sometimes the hardest step and that’s where I think a lot of people don’t get it if they are just getting by with what they are doing now.

  4. Hey John, I want to eliminate my debt (about $4,000 in credit cards), save up for a down payment on a house, and I’m juggling whether or not I want a new car (this is just a want; my current car runs just fine. More concerned with warranty running out). Right now I’m doing everything I can to eliminate my debt, but I also need to build an emergency fund (something I learned from when I was unemployed).

  5. Great thoughts everyone. I think Clayton is on to something. People just need to start on the right path. Most of the struggle to live healthier and prioritize better is simply getting started! Wesley mentioned self control is the key. I agree. We have to look in the mirror and make ourselves behave!

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