Rarely does a day go by when I don’t think to myself, “There’s so much to do!” I’m pretty much always on the brink of total schedule failure and it only seems to get worse as I get older. Feel my pain?
In that type of mood, I had a funny moment the other day when I said the phrase, “Jack of all trades,” to my husband. He laughingly replied, “Yeah, but do you know the second half?”
Second half? All my life I’ve been saying that and I didn’t even know there was more to the story. So I asked him to enlighten me.
“Jack of all trades. Master of none.”
Well. That certainly changes the meaning – and it sure isn’t what I was thinking all along. I thought about it a bit more and realized that, as a society, we seemed to have perfected the lifestyle of doing everything and feeling focused on nothing. We count our accomplishments rarely by how well we do, but instead by how much we do. The problem has become even more pervasive for women as we’re told we’re supposed to want to “have it all”, whatever that means.
So it should come as no surprise that many of us feel that our focus in life is splintered by all the things we have to do to remain afloat – and our personal finances are a big part of it! No matter who you are or how much money you make, there’s so much to do to become and remain financially healthy. Maintain a budget, pay off debt, build an emergency fund, save for retirement, invest…the list goes on and on. But without having unlimited funds, how is it possible to allocate money to all of these things? And where do we even start??
The truth is, the only place to start – and the only way to start, really – is one of these goals. If you start out allocating all of your time and energy to budgetingpayingoffdebtbuildingasavings, you might find that you see little movement in your goals and fizzle out quickly. But if you pick one (this month you will build a budget and you’ll work on it until you get it right!) you can quickly perfect one area so you can move on to the next.
That still leaves the question of where to start. For this, there is no one size fits all solution. But, there is a way that you can understand how to prioritize each of these goals so you can achieve financial freedom faster. So let’s get to it!
1. Understanding the Need for Focus
Let me start off by saying that, when it comes to focus, I’m the worst. I used to be excellent at concentrating, but these days my brain seems to have only one speed: hyperspeed. That means I’m usually thinking about the next three things I have to do while working on my current task. Awesome for productivity. Terrible for focus. And even worse for my financial self-esteem.
For most people, financial goals just can’t be accomplished that quickly. Paying off debt takes months and even years for most. Building a retirement takes a lifetime. And budgeting? That’s something many of us start and fail about a million times before we get it right. So if you’re like me and tend to already start thinking about the next goal before you finished the first, you’re destined to be disappointed in your progress.
This is just one reason why focus is so important. Helping you to stay grounded in the task at hand, focus prevents you from getting ahead of yourself.
Another reason focus is important is because most goals are achieved more efficiently when given our full attention. If you have three credit cards to pay off and you split your money evenly between all three, it can take much longer to pay them off than it would if you allocate all of your extra money to one of them while paying the minimum on the rest. The latter applies your money more efficiently (by ensuring more principal gets paid off) and it gives you the glimmer of hope you need as you start to pay them off one by one.
Finally, having focus helps put your brain into a mindset of determination and creativity. If you’ve decided you want to pay off debt as fast as possible and spend each day working on it, you’ll find more and more unique ways to achieve that goal. Suddenly that lunch you wanted to buy doesn’t seem worth it when you know saving money will help you pay off debt faster. Or perhaps you realize you have some time to pick up extra income. If our goals are forefront in our minds, suddenly the world seems to open up limitless possibilities for achieving them.
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2. Picking Your Financial Pain Points
Once you resolve to develop focus, the next step is to understand your deepest financial pain points. There should be both an emotional and logical element to this – especially since our emotions are part of what makes us latch to all the goals at the same time. Some days I want my student loan debt to be gone forever, other days I feel like my lack of retirement savings is a much more pressing issue, and there are other days when I just wish I could have a more flexible budget.
Logic is the tool to balance the emotional seesaw. You probably know what’s hanging over your head most of the time, but is it truly the most pressing issue? For example, if you have a high balance on student loans or a mortgage, you might feel the weight of that heavily and want to knock it out asap. But if you’re also carrying much higher interest rate credit card debt, then that’s costing you more each day than your fixed rate installment loans. The logical choice is to focus on what costs you the most money first – so more of your money will be freed up when that’s paid off.
But math isn’t the only part of the logic equation. Factor in your lifestyle too. Last year I was a debt payoff machine – making more progress on my student loans than ever before. But then my husband got an opportunity to join a startup incubator (which would help him to achieve a lifelong dream of building his own company). That also meant he was going to have to quit his job and subsist off of the meager initial investment from the incubator. Knowing that our household budget was about to get tight, and fast, I immediately switched my debt payoff focus to ultra-savings focus. I knew we were going to need a solid emergency fund if only one of us was earning a salary. While having debt was a bigger painpoint to me, the need to build savings at that point was clear. So I focused on not what currently felt like my painpoint, but what would truly become the painpoint later if I didn’t plan properly.
3. Strategizing for Next Moves
Just because we’re talking about developing a targeted focus doesn’t mean that there shouldn’t be some element of future strategy involved. Take the example above. If I hadn’t been flexible in my focus when my future suddenly changed, my husband and I could have ended up in some serious financial pain because of it. It’s imperative to check in on your focus regularly to be totally sure that it maps to the future you’re trying to build – and to be adaptable when life throws you curve balls.
So as you think about the financial area that you truly need to focus on first (for example, paying off debt would be extremely hard if you haven’t yet learned how to budget), remain mindful of a greater plan ahead. That’s how you’ll know you’re choosing the right priority first and that you’ll see the bigger picture when it gets hard to keep going. But don’t do it in a way that has you feeling disappointed that you’re not there yet! Do it in a way that helps you keep your eye on the prize and remember what you’re working so hard for.
4. Building On Your Financial Foundation
This guide is meant to help those who need help developing their financial priorities, but the beauty is they won’t need this forever. Once you become skilled at adapting your financial priorities to your present and future needs without overwhelming yourself (or your budget), then you’ll slowly be able to start working in more goals at the same time. The key being that you work them in slowly.
For example, if you’re on a solid debt payoff plan and receive a boost in your income, you might find that you want to allocate a small percentage of it to retirement savings as well. That’s something you can work in once you feel you’ve built a strong financial foundation. But until then, the key to setting financial priorities lies in focus and understanding what you truly need to accomplish first (not what you feel you are expected to accomplish first).
Image Credit: Robert Parviainen