Whether you know it or not, you are always setting your financial priorities.
Some may decide that a new stereo system is more inportant than this month's
electric bill. This may be a little off the wall, but it is still setting your
Anyone wanting to better manage their money would be wise to determine what
their financial priorities are and stick to them. Of course, if you see that
these priorities will not put food on the table and pay your bills, then you will
have to rethink your priorities.
Setting your priorities is simple. You just decide what is the most important
aspect of your finances and put that item on top. However, if you decide on that
stereo over your electric bill, you may find yourself in the dark with no need
for a stereo.
There are basic priorities that pertain to everyone. These are simply a
matter of survival. Here is a list of the basics:
That was a tough one.
What does it take to ensure that our basic needs are met? The main ingredient
is a source of income to pay the rent or house payment, pay the utilities, and
buy the groceries. This is where you start setting your priorities.
Before you can spend another penny, you have to take care of what you need to
survive. Don't put off the rent or house payment, utilities, and don't skimp on
your groceries and necessary health items. If you do, you will start experiencing
money problems much sooner than you would if you had delayed paying other bills
What's next? If your source of income happens to come from a job, then I
would say your transportation. You have to get back and forth to work so you can
afford all of the other stuff. This would include your vehicle payment, gas,
insurance and maintenance. If your source of income is not a job, then go to the
And Now? Naturally, this would be your other bills. You can even split this
category a little further.
First, you have your bills that are secured by property. You should always
pay these bills first.
Secondly, your unsecured bills which are probably credit cards.
The reason you should always pay your secured bills first is that it is much
more likely that they can take the secured property and probably will unless
payment is made. While credit cards companies are notorious for their threats,
they very seldom follow through. I'm not saying not to pay them, just that they
aren't as high a priority as your secured bills.
Next would be your savings. I really to hate to list savings as your last
priority because having a savings can prevent the use of those dreaded credit
cards and help in so many ways. If you have the money to cover all of your other
priorities, then you should always put savings at the top of the list. However,
if you don't have enough money to cover your bills and expenses, then your
savings will have to be the first to go.
Just to recap. The below list is an example of what your financial priorities
should look like:
1. Groceries and Necessary Health Items
2. Housing (Rent or House Payment)
5. Secured Bills
6. Unsecured Bills
Let's hope that you never get in the position to have to decide which of the
above list will have to wait. But if you do, following the above priorities is
absolutely necessary to ensure your survival.