How to Prioritize Your Financial Goals and Build Wealth

Problem #49: I Feel like My Money is Spread too Thin Across too Many Goals.


You know the advice. It’s on all the financial blogs, and it’s all over social media. You have to save for an emergency fund. You also need to save for retirement. Oh, and by the way, if you’re a nice person, you should save for your kids’ college. And that’s only three things you have to save for. Then there’s anything that you want to save for, like re-modeling your house, buying a new-er car, or going on vacation.

Don’t forget, another thing you should do is pay down your debt – all your debt. Your credit card debt, student loans, mortgage, car loan(s), 401k loans, and home equity loans. Are you overwhelmed yet?

So how do you know where to start? Which one of those things is the most important? Can you say . . . PROBLEM?

You do want to take care of all those things, just not all at once. It’s hard to make any progress when your money gap is spread across so many different important goals. Let me show you what I mean. Then let’s prioritize.

Do You Unload the Groceries in One Trip or Many?

groceriesHow many of you do the grocery shopping in your house? I don’t shop for the groceries, but I do help my wife when she returns from the grocery store. I usually have one task – unload the trunk.

In the spirit of efficiency (in my mind), I usually try to unload all the groceries in one trip. How many times have you guys done this? You load up each arm with at least 8-10 plastic grocery bags trying to grab them all. Then you stagger slowly into the house with what seems like a hundred pounds of groceries threatening to dislocate each shoulder. You look like Godzilla lumbering in shaking the floor with each step. With a red face and fatiguing arms you finally reach the kitchen where you can plop the bags on the floor.

My Wife’s Response

It never fails. My wife always asks, “Why don’t you just take more trips to the car? It will be easier for you.”

I always answer, “It’s more efficient this way.” as my shoulders and arms ache from the ordeal I just put them through. And there’s always the satisfaction of being able to unload the entire trunk in only one trip.

But is it really more efficient?

It always takes a few minutes to try to slip your hands through all the loops of all the bags. You know if you miss one, and drop the bag, you’ll never hear the end of it.

Then there’s the actual trip into the house. You can’t bound through the door and into the kitchen while you’re loaded down with all those bags. And if you have a baby gate to climb over, you can forget it.

If I were to unload the groceries in say . . . 4 trips, I’m sure it would take the same amount of time, but with a lot less struggle. I can certainly go faster with 3 or 4 bags than I can with 20. And my arms will thank me too. So . . . I admit it, it would be better to take several trips to the car for the groceries instead of one epic journey.

Stop Doing it All At Once – Prioritize Your Financial Goals

So for your finances, how many of the things in the list above are you working towards all at the same time? Are you trying to save for retirement and your kid’s college while pay off debt? How’s that working for you? Are you staggering through life loaded down with all these things you have to pay for? If you don’t feel like you’re making any progress, try to prioritize your goals and work through them one at a time, starting with . . .

Start with an Emergency Fund

The highest priority should be an emergency fund. Or some amount of savings set aside for unexpected expenses. If you don’t, it will be too easy to accumulate more debt when something comes up. And more debt will set you back even further. This step should take 1-3 months. If you already have emergency savings – great – move on.

Related: Do you have an Emergency Fund for . . . peanut butter?

Pay off Consumer Debtmoney on fire

Once you have an emergency fund, even if it’s only a thousand dollars to start, start on the next goal. Which in my opinion, should be paying down all debt except for your mortgage. Use the snowball method, or use the avalanche method. Either one will work because you will end up concentrating on one debt at a time until it’s gone. Then you move on to the next debt.

Related: Which method should I use to pay down debt quickly?

This is the hardest step, and the one that causes most people to quit. Why? Because it’s hard and it usually takes more than a few months – depending the amount of debt you have. It could take 6 months or a few years. Just know that the interest you’re paying is killing you. You have to get rid of that debt.

But, if it’s going to take more than 2 years to pay off your debt, you will want to also save something for retirement at the same time – especially if you can take advantage of an employer match. You can’t afford to lose that time. Only do this if it will take more than two years to pay off your consumer debt. Otherwise, just buckle down and get rid of your debt.

Check out for a timeline and schedule based on your specific debts.

Then Start Saving for Retirement, Kid’s College, and Paying off the Mortgage

prioritize financial goals

Once you have no debt (except your mortgage), then you can use your extra money to make measurable headway. Just think what you could do right now if you had no car payments, student loan payments, or credit card payments. How much more would you be able to save for retirement? Or how quickly could you pay off your house? You can’t even have the debate of investing vs paying off the mortgage until you get here.

This is the real wealth building step. This is where my wife and I are, and let me tell you – it’s fun. We have our necessary-to-live expenses (food, transportation, utilities, mortgage, etc.), and THAT’S IT. No other debt, and it feels great! We can decide how we want to spend or save the rest of our money. We do have some goals that we are working towards. How about you?

Those of you who are familiar with Dave Ramsey will notice that these steps are similar to his “Baby Steps”. Uncle Dave has done very well getting people out of debt, and on the path to building wealth. I’m a fan, and I do follow his advice. But this advice is not his alone. He didn’t invent it. He just re-packaged it in an easy to understand way. Most of this is common sense. But as most of us know: common sense is not always common.

Perhaps hearing it from me will help it to sink in more. You can do it. Prioritize, prioritize, prioritize, and don’t try to do it all at once.

Where are you in these steps? Are you paying off debt or saving? Let me know in the comments.


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  1. Love this post. I even laughed at the baby gate. Oh how I hate getting over the gate with two arms full of groceries and a toddler blocking your path.
    Otherwise, you made paying off debt look like fun. Let’s do it! Here’s to no more mortgage!!
    Love you!

    • We certainly need to destroy our mortgage – while investing for our future at the same time (we can do that at the same time). We’ll get there. 😘

  2. Great post and thanks for sharing! I have a hard time with advising people to throw as much money at debt as possible. Unless it’s a high-interest rate, it makes more sense to invest. Eventually, your debt will be paid off and your net worth will be better off in the loong-run.

    • Thanks Lance, the only debt I wouldn’t put in that pay off now category would be a mortgage (it’s usually low interest on an appreciating asset). All other consumer debt is a drag, and should be eliminated. The interest you save by paying it off early (hopefully a year or two – longer than that and we have to talk) will more than make up for the time lost investing – plus you’ll have extra to invest when you have no payments. 😉

  3. We are currently paying off our mortgage (only debt) and heavily investing in low cost index funds via 401k and HSA. It is exciting to see the progress on our goals and we look forward to reaching various milestones along the way!

  4. Haha, I used to date a guy who’d do the same thing with groceries. I felt really bad every time I had to dig through my purse to find the house keys while he had twelve bags along his arms…

    This is a great post for prioritizing your spending. It does feel really overwhelming, which only makes you feel like more of a failure if you somehow aren’t managing to do it all…

    • I hate when people think they’re failures, just because they are trying to do it all at once. It really is encouraging to see measureable progress, and then move on to another goal, and knock it out.
      Thanks for the comment.

  5. Yes, starting with an emergency fund 1st is a good plan. It is smart to have a financial cushion for those unforeseen expenses. The only other point I would add it to contribute enough to your 401k to get the matching contributions. To not do that would be leaving compensation on the table.

  6. I’m so guilty of trying to get all the bags in at once too!

    Only debt currently is a mortgage, but we’ve recently made a decision to purchase another home for family members to rent out so that will create additional debt and reduce our savings. We’ll be doing everything we can to build the savings back up quickly and then throw extra funds at our mortgage again.

  7. I’d rather carry all the bags in at one time, too! I have over $20K in an emergency fund because I also own rental properties. At one point in time, this was over $65K! It really sucks missing out on the great gains. I’ve been looking into other ways of having liquid assets. Just need to make more time. I’ve never heard of before but I’ve added it to my toolkit. Looks like it could be very helpful to others especially since it’s free…I think.

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