Now you know your current location, you and you have a map. Time to hop in the car and drive! Not so fast my friend. Life isn’t one big joyride. You need to have a destination planned for where you are going. You need to take time to plan what you want your life to look like. What are your priorities?
Most financial advice you get would look at your net worth and income statements and immediately move on to solutions. This approach lacks the personal touch and misses on a key element of personal finance. Personal financial advice needs to be personal.
One key to living the life YOU want to live is determining what is most important to you. Not everyone has the same goals. A nice home to entertain guests and raise a family in may be a priority for some. Others may be perfectly fine is a smaller home because they value flexibility and traveling. Some are in a hurry to achieve financial freedom as young as possible, while others are perfectly content retiring at the conventional age of 65. Everyone is wired a little differently, and that’s what make the world such an interesting place.
The dictionary gives one definition of sacrifice as “an act of giving up something valued for the sake of something else regarded as more important or worthy" (emphasis mine). If you are cutting back on expenses just for the sake of it, I don’t call that a sacrifice. I call it depravity because you are not doing it for any specific reason, other than to deprive yourself of what you want. It's a whole lot easier to cut back on things when you have something you regard as more important. Having priorities for your life allows you to make worthwhile sacrifices.
A huge reason why people get into bad financial situations is because they don’t have a plan for their life. With no plan it’s easy to look at a shiny new car, and say, “Sure. Why not?” Having a plan for your life allows you to stay focused on what’s important. That way, when you are tempted to buy a new car, you can say, “Looks great, but I’m saving for ________, and I don’t have room in the budget for that now.”
As soon as you start to focus on the big picture things in life that are important to you, you might find that you’ve been spending plenty of time and money on unimportant things. Money is a finite resource, meaning there will always be trade-offs involved. Plenty of difficult decisions around money will need to be made over the course of your life. Having goals and priorities can make some of those decisions a little easier.
Determining what is important to you, and the why behind it, can be a lengthy process. Don’t expect a quick hour conversation with a spouse or friend will give you complete clarity. While you go through the process of prioritizing your life, continue to ask yourself the why behind your answers. Why do you want to achieve financial freedom? Why do you want to get out of debt? Why do you want to buy a home? Why do you want to provide for your kids? The answers may not always come easy, but the process will be rewarding.
Remember, there are constant forces all around us (friends, family, ads) that can influence the things we spend money on. Take control of your life by making sure that your spending is in line with your priorities.
Look back over your life and try and pinpoint the things that gave you the most satisfaction. Look at people you define as successful, and ask yourself, what about their life do you consider a success? Try to incorporate those things into your life's priorities.
A good way to tell you are living a life that you want to live is having enough confidence in what you are doing that you don’t care what other people think. The things you are most passionate about, are the things you will tell people about unabashedly. The more you conform to someone else’s plan for your life, the less satisfaction you’ll get out of life.
Someone is going to prioritize your life, might as well be you.
A Few Examples of Priorities
Living a healthy life
Achieving financial freedom at a young age so you don’t have to work
Helping others in need
Raising a happy, healthy family
Spending time with the ones you love
Having a home to entertain guests and raise a family in
Experiencing new things
What are your priorities in life?