How To Prioritize Financial Goals and Gain Perspective

Posted by under Mindsetting, Personal Finance . Published: July 20, 2016

All of us have financial goals — buy a car, own a house, start a business, save for a child’s college education, and retire comfortably are perhaps the most common.

When there’s so many goals that we want to achieve, how can we optimize our cashflow and investments so that we can reach all of them?

Unfortunately, most people would simply muddle through their financial lives, hoping that everything will be okay in the end. They’d always be more focused on their day-to-day expenses and forgo planning for their biggest goals.

This kind of mindset would often leave most of their financial goals unfulfilled. They’ll be able to buy a car and own a house, but then they’ll struggle with their child’s education. So they end up working all their life and without a retirement fund.

How many people do you know are on this path? Are you on this path? If so, it’s time to change that today.

Make a list

The first step is to make a list. Write down all the things that you want to buy, do, and achieve in the future.

Don’t limit yourself and include both necessities such as a comfortable retirement; and luxuries such as going on a cruise around the world — remember, you are designing your life.

Make your list SMART

There’s a saying: “A goal without a date is just a dream.”

That’s why this is your next step. You have to tweak your list and make it specific, measurable, attainable, relevant, and time-bound (SMART).

Read this next: How to Have SMART Goals

financial-goals

Force yourself to rank your goals

This is perhaps the most difficult step. Personally, I discovered that the easiest way to do this is to do the process of elimination.

Ask yourself: “Among these goals, which one can I live without?”

Once you’ve decided, cross it off and transfer that to a new list — the one sorted according to priority. Put that in the lowest slot. Repeat the process until you’ve ranked everything.

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It’s important to remember that there are no right or wrong way to prioritize your list. Each person is different and you should listen only to yourself, and not what society normally dictates.

For example, while it’s considered a parent’s responsibility to provide education for their children, don’t berate yourself if you want to put that luxury cruise a higher priority.

It helps to remember that this ranking is not set in stone and your objective here is to gain perspective on how you should plan for your future.

Create a narrative to gain perspective

Now that you know your priorities, it will do you good to create a narrative on how you plan to achieve these goals accordingly. Tap into your creativity and imagination to tell a story of how your future will happen.

Sometimes, doing this step will make you re-evaluate your priorities and re-assign the ranks. This is normal and is all part of the process.

By going through this step, you will certainly get a better handle at how you should spend and allocate your income today. Additionally, it will motivate you to nurture good financial habits because how else can you achieve your goals, right?

To illustrate further, let’s say that these are the first 5 priorities on your list:

  1. Retire comfortably – 20 years from now – P20 million fund
  2. Go on a luxury cruise – 2 years from now – cost is P200,000
  3. Child’s college education – 8 years from now – P700,000 fund
  4. Buy a house – 3 years from now – worth P5 million
  5. Start a business – 5 years from now – P1 million estimate capital

Your narrative then can go like this:

My cashflow allows me to invest P10,000 each month. I’ll invest P3,000 towards my retirement fund, and save the other P7,000 for that luxury cruise.

After the cruise, I’ll funnel the P7,000 towards funding my child’s college education, but I have to increase my income because I’d most likely be applying for a loan 3 years from now to buy a house.

I could look into starting something home-based today, which I can slowly scale to a proper business within the next 5 years. The extra income can augment my cashflow so I can afford the mortgage… and so on.

Revisit your list when circumstances change

Life will happen, and some circumstances may affect and change your priorities. It is for this reason why you should go back to your list periodically and re-examine your goals.

You can add or take out goals, change their ranking, and write a new narrative for your financial plans.

By doing so, you will no longer be most people who are drifting through life, simply hoping for the best to happen. You will become someone who’s actually doing something to achieve the best in your life.

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Photo credit: zzzzz




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3 Responses to “How To Prioritize Financial Goals and Gain Perspective”


  1. an eye-opening reminder. Thank you Sir Fitz!

  2. Gerry says:

    I already done the list and arrange accordingly to my needs, now i know whats my next step to do the narrative. Thanks sir fitz as always helpful.

  3. Theresa Protacio says:

    Sir fitz, i feel i am at the age that my productivity have slowed down. But when i was younger., i have saved especially for an only child’s education. I have invested in CAP, Peplans and Prudential life. Am i so unlucky that all of these have folded…now, i am back to my envelope system again to save for my child’s education, my remaining insurance premium for Philam and Prulife (heaven forbid i wish they remain stable) . I am just a GP whose practice is threatened by HMOs and nolonger hold hospital visitations to lessen stress.
    No use blaming these companies(though i know they are at fault) but can u suggest how to get back with the returns safe enough but high enough since it will be used immediately,i.e., tuition and daily expenses

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