Over the years, I’ve decided that the secret to making financial decisions is to identify three things that you care about, then using them to set your priorities and discuss your choices.
When I was just out of college, my three priorities were paying off my credit cards, paying off my student loans, and buying nice clothes for work. (It’s okay if you have a frivolous priority or two, as long as you can afford it.) I didn’t travel, and I didn’t have fancy furniture. I didn’t even have a TV for a long time.
Right now, my family’s priorities are our kid’s education, keeping the house maintained and getting it paid off, and travel. I work at home most days, so I don’t need many nice clothes! In a few years, my kid will have moved on and the house will be paid off, so I’ll have different priorities – probably aggressive savings before retirement, travel, and maybe a new business venture.
Whatever they are, if you have them down to three, you can tell people (and most people respect a clear goal.) You can figure out what to do with a little extra money to get the most power from it. And, you can make progress on things that matter to you.
If you’re stuck about what to do financially, sit down and figure out the three things that are important to you. Where will you get the most stability and the most enjoyment? What will make the greatest difference right now.
Write your three things down. And go out and tackle them!
March 8 – March 13 is Women’s Money Week 2013, and every day, a bunch of bloggers – including me – are writing about different issues affecting women and their money. I’m cross-posting this on Chicago on the Cheap as well.
