The end of the year brings a lot of reflection for many of us. I often think about how I managed my life and money during the last 12 months, and think about what I can do better moving forward.
As you think about your money management over the last year, and consider what should be next for the coming year, don’t forget to revisit your financial priorities.
America’s Top Financial Priority: Managing Bills
For many of us, a discussion of financial priorities starts with managing our bills. According to a recent survey from Bankrate.com, 38% of Americans list staying current on living expenses or getting caught up on the bills is the highest priority.
Following managing bills, the next biggest priority is paying down debt (21%). Finally, saving is a priority for about 18% of Americans, according to Bankrate.com’s survey.
This offers some interesting insight into where Americans stand with their finances. First of all, the survey indicates that 77% of Americans are struggling with the basics of getting their finances on track. Before you can focus on financial priorities like paying down debt or building up savings, you have to be able to manage your daily bills. And before you can move on to higher-level priorities like retirement planning, college planning, and buying a house, you need to have your debt under control and some sort of savings in place.
Even with the improvements we’re seeing in the economy, it appears that many Americans are still trying to get a handle on things — just keeping up the requirements of living.
Moving Beyond the Basics
Building a foundation is important in personal finance. Your financial priorities should center on taking care of the basics if you are struggling in those areas. However, the ultimate goal should be to move beyond the basics so that you are no longer treading water and trying to make ends meet. You want to be able to build your assets and prepare for the future.
In some cases, moving beyond the basics means making it a priority to take extra steps. Start by looking at your expenses. Are there things you can cut from your budget to save more money and make it possible to stay up to date on your bills? Next, look for ways to earn more money, whether it’s a side gig or a second job. Figure out how you can get more money coming in to help you establish a little more stability.
Once you have paid down debt and got your bills under control, you can start using money to build savings and obtain a little more confidence in your financial situation. This will allow you to use your resources to plan for the future. As you move beyond the basics, your financial priorities will change. It’s not always easy to get to this point, though. It requires work and discipline, and an interest in really changing the way you do things.
As you reflect on the year, what have been your priorities? And what are your financial priorities for the coming year?