Now that things have settled a down bit since buying our first house, a whole new issue has risen. Instead of saving for an emergency fund, savings and a trip to Europe (like before), now there are house related things we want to save for.
Deciding which financial goal to tackle first is more difficult than I thought it would be. Some of the things drive me so crazy that at the moment, they seem like they should be the first priority.
When I’m stuck at home without a car or have to walk a billion miles (okay it’s more like 3/4 of a mile each way) to pick up our kid from school and walk back—getting a second car is the most important thing in the world. Nothing else matters.
But then when I’m having an amazingly awkward time in our creepy tub/shower or remember that it’s been like 3 months since I’ve been able to take a real bath—replacing the tub takes the lead. Suddenly the idea of a second car seems silly.
It’s so hard to prioritize when everything wins depending on the situation. How do people decided which ones to save up for first?
The Snowball Approach
You could always start with the least expensive goal and get that one out of the way. Then continue on to the next one and save the largest expenses for last. There would be a little less waiting between goals, but what it would take forever to get to the most expensive one.
The Quality of Life Approach
Which one would have the largest impact on your quality of life? It would make sense that this one should be done first to increase your happiness and motivate you to continue on the other goals.
The Common Sense Approach
Obviously if your refrigerator stops working, that should be a higher priority than a trip to Europe. Some things just make more sense to tackle first, whether or not they are more expensive.
The Random Approach
If you’re really having a hard time deciding which financial goal to choose first, you could always try your luck. You could write down you goals on small pieces of paper and draw them from a hat (or something along those lines) to determine the order.
The Everything Approach
Sometimes it can be really hard to make decisions, especially when everything appears to be urgent. You might not want to work toward only one goal at a time, so instead you do it all at one. Spreading out your money like that will make it feel like it takes longer to reach your financial goals, but it can feel nice to know you’re making progress all across the board.
How do you decide which financial goals are the highest priority?
Image Credit: http://www.flickr.com/photos/inafrenzy/5787848646/