Financial Priorities – What They Are And How To Change Yours!

I recently posted a picture on Instagram that got as many, or more likes, than any other post so far.  It was about financial priorities.  Once I saw the reaction it got, I realized I needed to do a deep dive on this topic.

The root of this idea goes back a long way for me and it really is a powerful concept if you stop and think about it.  The basic idea about the true value of using your personal finances as a tool is far greater and more potent than most people realize.  You see, your finances reveal a lot about you, I know this from years of looking at clients’ financial records.

If you look at someone’s finances closely, you can tell what their health is like, for example.  You can see what kind of food they eat and whether or not they smoke.  Are they organized or religious?  Do they have a job and what kind of work do they do?  What are their hobbies?  How big is their family, how many cars do they have?  You can also tell if they are criminals.  After all, where does all that randomly deposited money come from, anyway?  I’ve actually seen embezzlement several times in bankruptcy cases.  Sad, but true!

The revealing power of your personal finances hit home for me years and years ago, in the early days of my bankruptcy practice.  I had a client come in who had a significant drinking problem.  This client had accumulated a ton of credit card debt over several years time.  When he came in to bring me his paperwork and documentation, we went over all of his bills so I could correctly list them on his petition.  He pointed to his credit card statement and said to me, “you can see where I’ve been spending my money and what my problem is.”  Sure enough, half the charges on the credit card statement were to the local liquor store.

That was a powerful moment for me.  Yes, I knew and understood the concepts of “following the money” and looking for paper trails from a forensic accounting perspective.  This was different, though.  I knew the guy had a wife and kids.  There was nothing on that statement that showed he spent time doing anything other than drinking.  His finances showed me that the number one priority in his life was alcohol, not his family or travel or church or whatever it is that we need in our lives to feed our souls.

That’s when I began to realize that you can use your finances to figure out what you need to do to change your life!  From that point, I began to see money management as a tool, not just to build wealth but to be happier, in general.  I know, I can hear you saying, “I would be happier if I could buy that Mercedes Benz and the 42 Kate Spade bags I’ve had my eye on.”  That’s not what I mean, we all know you can’t buy happiness!

What I mean about using your finances to be happier is a little more introspective.  Think about it like this.  Ask yourself if you are happy, truly content and satisfied.  If you aren’t, get all your bank statements, credit card statements, check book register and maybe even your tax return for the last year.  Look closely at them and figure out what you are spending your money on (hint, hint… if you are budgeting, this task is a simple one).

Once you know where your money is going, think about the fact that your current spending behaviors and patterns are not making you happy.  This can be a difficult thing to do because it takes brutal honesty.  If you are lying to yourself about your finances or the things in your life that are really making you miserable, you are wasting your time and energy.  Oh, and remember, the numbers never lie!

So, now that you’ve done the hard part, the next part is easier and a whole lot more fun.  It’s time to figure out what your true priorities are.  What do you care about the most?  Spending time with your family?  Being active in a volunteer capacity or at church?  Pursuing a life passion?  What is it that lights you up and makes your life worth living?  The answers to those questions are, and should be, financial priorities for you.

The only thing left is to figure out how to adjust your finances to fit and reflect your financial priorities.  Here’s an example of what I mean.  Let’s say you live in a house that costs one third of your gross annual salary to pay for and maintain.  It has a basement, spare bedroom and two car garage.  You bought that particular house because you heard that housing should cost no more than one third of your annual gross income and for lots of people, their house is their number one asset.  In your mind, it was a smart move that fit the conventional financial wisdom out there in cyberspace.

The question you have to ask yourself is whether or not you need that house or whether it is serving your priorities?  If you are single with a compact car, no pets and very little furniture, you probably don’t need that house.  If you are working just to pay your mortgage but what you really want to do is travel the world, maybe it’s time to put that house on the market and downsize your possessions (and your job, too), so you can do the thing that you are truly passionate about.  Or, get yourself some roommates who will help you pay the mortgage and cut the grass while you are in Bora Bora or wherever it is your heart tells you to go.  See?  Tailor your finances to support your priorities!  It’s that simple.

Okay, you may be a thirty-five year old single mom with three kids saying, “this doesn’t help me at all!  I can’t quit my job because I have to put food on the table.”  I get that.  I know you because I am the youngest of four kids of divorced parents.  I watched my mom struggle financially for years.  It may not be easy, but it is possible.

You can begin to think about your passion and taking steps, however small, to feed that passion.  The good news is that kids do eventually grow up and (hopefully), become capable of taking care of themselves.  If you want some help figuring out what I mean by feeding your passion now, check out Elizabeth Gilbert’s Coffee Can story.  That is how you get started on your way.

I hope this helps you begin to understand how you can use your finances as a tool to begin living a happier, more peaceful life.  Remember, you have the power to change your life with patience, gratitude and hope.  You just gotta hang in there and never give up!

Joy Alford-Brand

Your Dollar Lama

P.S.  Don’t forget to check out my YouTube channel and Facebook page for videos and more information about money management.  Don’t forget to check out our online courses, books and resources, too!  Investing in your money management education is an investment in yourself.  That’s the best investment you’ll ever make, I guarantee it!