by Stacy Francis, CFP®, CDF
“I can’t sleep at night,” complained a savvy lady over breakfast last week. Seeing the dark circles under her eyes, I didn’t doubt it was true. A venti caramel macchiato later, she explained that at age thirty-six, she had only recently started to look into personal finance. Now she felt so bombarded with should-haves that she had no idea where to start.
She has a good point. Even during slow, quiet periods of our lives, it can be difficult to keep up with everything financial. And when things turn crazy, like they do from time to time, it can be near impossible. Fortunately, there’s relief. See below for a list of your top five financial priorities – in order.
- Pay your bills – preferably on time. Make sure they don’t exceed your income, and if they do, make it your very first priority to cut your spending and/or boost your income. When your accounts payables and accounts receivables match, and you are no longer struggling to make ends meet, take a breather and give yourself a pat on the shoulder.
- Create a financial cushion for yourself. Even as little as a few hundred bucks can have a dramatic impact on your shut-eye. Even better, you will save a bundle on late fees, financing charges, bounced check fees, etc.
- Start saving for retirement. Even if the amount you can spare is so tiny, you can’t see how on Earth it’s supposed to make a difference. Not only do the dollars you set aside first matter the most, as they have the longest time to grow, but you get yourself into the habit of saving, which is, as MasterCard likes to put it, priceless.
- Pay off your worst kinds of debt, such as high-interest balances and debt where the lender can change the loan terms easily.
- Look into long-term disability insurance. This may not be the rosiest of topics, but life can be dangerous and you need to make sure that even if you do lose your ability to work, you’ll have food on the table.
Now, take a break. Really, you have taken the five most important steps toward financial success.
