What Are Your Financial Priorities?

Money doesn’t grow on trees. It takes a combination of hard work, dedication and personal skill in order to make money. Whether you’re a freelance graphics designer working with high-profile clients or a kitchen porter at a restaurant, we all go through tough situations in order to get our salaries. As a result, we can’t just spend our money on random purchases—we need to prioritize our finances.

But finding and setting your priorities can be difficult. There are so many things that we spend money on that it can often be difficult trying to figure out what’s more important than the other. To help make thing easier for you, here are some suggestions as to what you should be putting your money towards.

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Rent and Bills

Rent and bills should be considered one of the highest priorities. If you’re unable to pay your rent, you’ll be swiftly kicked out from your accommodation and you’ll be forced to move in with friends or you’ll end up on the street. Similarly, you need to pay your monthly expenses or else you’ll be without essentials like electricity, gas and water. Sound simple, but it’s good to remember that this should be near the top of your priorities.

Insurance

In order to protect everything you own, it’s important to think about your insurance. When looking at insurance for your car, truck, or motorcycle, make sure you shop around for different quotes because prices can vary greatly depending on your circumstances. For home insurance, make sure you’re looking at the fine print to see what exactly the insurance plan covers because it can differ. You want to keep your belongings and your health safe, which is why insurance is another top priority.

Mortgage

They say that debt is a bad thing and it’s true in most cases. However, mortgages are an example of good debt because it’s an investment into your future. Purchasing a home is a milestone that many people aim for. Whether it’s for your retirement or a future with your family, owning a home is worth being in debt for and should be a priority when you’re budgeting.

Essentials

There are plenty of things that we need to purchase as humans in order to live our lives. Whether it’s groceries, toiletries or even clothing, it’s a good idea to reserve some of your budget for life essentials. This increases in priority if you’re missing something, but it’s perfectly acceptable to lower this if your pantry is full and you have plenty of clothes to wear.

Ability to Work

Anything that affects your ability to work such as fuel costs, transport fees and computer payments should be prioritised if it affects your ability to work. If your car’s tank isn’t full at the start of the week, then bump it up in priority for your weekly budget. If your computer is on its last legs, then put some money towards repairing it or purchasing a new one. It’s important to fund your ability to work or else you’ll have difficulty securing a source of income to pay for the rest of your priorities.

Retirement

No one likes to think about growing old, but it’s an inevitability of life that we need to cope with in one way or another. If you find yourself struggling to save money for your retirement, then consider taking a second look at your budgeting. There are probably many different ways for you to save cash, and while saving money for the future seems silly due to inflation, there are ways to invest your money for a better retirement.

Children

Of course, we also can’t forget about our children. Whether it’s fees for college and university, their first car or even toys for their enjoyment, you should be providing your children with a future they can grow up happy in. There are times when you’ll have to compromise (you can’t spoil your kids too much!) but the general idea is to provide your children with a carefree life while they’re still young.

Personal Entertainment

And lastly, we can’t forget about personal entertainment. Sure, buying too many things for your hobby or spending too much money on subscription-based entertainment services can get expensive, but it’s still a good idea to reserve some money for your own personal enjoyment. Keep some money reserved for going out with your friends, and don’t be ashamed of buying something fun like a video game, book or even treating yourself to a holiday.

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