At every walk of life, you might have different financial milestones to chase. The first thing to do is set the priorities for each milestone and move forward accordingly. Sometimes you might feel that you’re moving as per plan, but the outcome is slower than expected. One of the ultimate aims for financial freedom is to be debt-free, but that’s not the only thing.
When should you re-evaluate your financial priorities?
At every stage, track your financial goals and keep an eye on the progress. You need to know whether you’re moving in the right direction. If you feel things are not moving as you wished, then it’s time to change the way you handle your finances.
“Progress is progress! No matter how small it is!”
When your current state of mind relates to the following, you need to re-evaluate your financial priorities:
• My progress is slower-than-expected
• Where do I stand, am I keeping up the goals?
• I should refocus on what is more important to me
• I think I am doing the right things but not with the right mindset!
How to Re-evaluate your Financial Priorities?
Once you understand when you need to re-evaluate your financial priorities, the next question that would crop-up in your mind would be:
How to Re-evaluate?
Quite possible that your financial goals would be totally different from what is listed below and so, you can make your list accordingly. Start by listing the areas where you feel things got deviated from the expected result.
Following are the areas where you can re-consider and change the way you handle these areas:
Track the Due Dates and Avoid Any Late Payments
One of the important areas where we lose track is shredding dollars on late payments. List down all bills and note the due dates to avoid any late payments. Organizing your bills will help you to handle your finances in a better-organized manner. This will also help you to handle your day-to-day tasks more systematically.
Most people get deviated because they forget to track due dates and thus, pay more than required for late payments. If this is the case, then re-evaluate where you’re lagging and start maintaining a calendar to track due dates. There are lots of apps available to track the due dates.
Clear Existing Debts and Avoid Any New Debt!
Consistently adding debts can be an important area to look for. If your debts are going out of order, then you need to re-evaluate your debts. Try to clear off debts as soon as you can. Prioritize the debts based on the interest rates and start by paying down the ones with higher interest rates.
Also, it’s equally important to avoid any unnecessary new debts to add to the existing list. Obviously, there will be quite a few debts which you can’t avoid taking. For instance, you might take a car loan to buy a vehicle and pay for it installments. Paying monthly installments on time can be an effective move to clear off debts in an organized way. Being debt-free is an essential goal that most people would have on their list.
Health is wealth
The greatest wealth we have is our health, and we should never neglect it. Health insurance is an essential part of financial goals, and we should contribute a small amount to it. Most companies provide health insurance for you and your family that comes as a part of the salary. You need to check the amount covered and the terms of it. If you feel it’s not enough for you, then you can even take a health insurance outside your company.
What are the needs and wants of your family?
Are you missing the figures with more of “wants” than “needs”? You need to analyze where you’re spending more and is it going out of the budget. Re-evaluate your needs and the moderate wants of your family. It doesn’t mean you need cut down everything from the “wants” list. You can prioritize and spend on both accordingly.
Do you maintain an emergency fund?
An emergency fund is something we use at the time of need, and it’s equally necessary to replenish it every time you use it. You need to set a priority to keep adding a part of a paycheck to your emergency fund account.
You need to keep checking the status of your financial goals once every three months. This will help you to check your progress, and you can know where you need to re-evaluate your financial priorities. Don’t worry if things are not moving as you planned. You can be a pro at handling finance only when you try different possibilities. Hope this article will help you to re-evaluate your financial goals and make it work for you.
James is a finance blogger and writes about personal finance tips and everything about money management.
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. Now that Brian is debt-free, his mission is to help his three children prepare for their financial lives and educate others to achieved financial success. He blogs at Debt Discipline.