How To Decide Which Financial Goal To Tackle First

How To Decide Which Financial Goal To Tackle FirstNow 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/

About Jen Perkins

Likes: saving money, being debt free (aside from our house), zombies, travel, getting money, blogging and dogs. Dislikes: debt, being broke, bunnies, wasting money, not having enough money to travel the world and paying interest. Facebook  ♥  Twitter  ♥  Google+  ♥  RSS

Comments

How To Decide Which Financial Goal To Tackle First — 32 Comments

  1. We definitely take the common sense approach. We stopped paying extra on debt a few years ago because we realized our cars would be breaking down soon and therefore would need to buy new ones (they did and now we have newer ones). Then we wanted to sell our house and move so we then started saving for a down payment. Now we’re going to a slightly different approach where 80% of our disposable income goes to the down payment and the other 20% will go to debt.
    Jason recently posted..Is Debt Consolidation an Opportunity – or a Trap?My Profile

  2. Common sense with a bit of quality of life. I would walk the 10 minutes to pickup my kid and forego the car purchase, because with a little organization you can probably make it work. The tub sounds more important to you, being creeped out is worse than being annoyed by the walk. I don’t have a special fun for each saving goal, I just queue them up as they appear and money comes in.
    Pauline recently posted..Can cheap labor make you lazy?My Profile

  3. Exciting to get your first house congrats! When we bought this house our chief financial goal was to pay it off, then renovations. We have since saved the cash in 3 and a bit years to pay the mortgage in full just by budgeting. Now we can sit back relax, renovate,travel and save for retirement. In the meantime we tackled all the small goals around the house like you mentioned. Looking forward to hear how your journey turns out! Cheers mate. Mr.CBB
    Canadianbudgetbinder recently posted..The Celebrate Like Scrooge Christmas Gift ExchangeMy Profile

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