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Financial Priorities | XL Financial Blog

5 Tips For Setting Priorities On Your Finances

Posted on 11. Jul, 2013 by in Financial Planning

Setting priorities for your finances will help you spend your money wisely, manage your debts and build your savings. Here are tips on how to take control of your money starting today:

1. Set Your Goals.

Write down your short-term and long-term money goals. Knowing what you need to spend for versus what you have will give you a clearer perspective about what you have to do to get what you want.

2. Spend Only For the Most Important Things.

Your top 5 priorities are:

- Home & Utilities

- Food

- Health & Medicines

- Insurance

- Debts

For all other items outside of these categories, think twice before buying or try to hold off your purchase for a few days to determine if you truly need them.

3. Know Your Debt and Manage It.

Calculate how much of your income goes into paying off your monthly debts. If you have debts and are struggling to save, focus on paying off your debts first. There is no point saving money when your debts are taking over your finances. The earlier you can eliminate your debt, the sooner you can build your savings.

4. Stop Getting Into Debt.

Setting priorities is more than just planning for the future. It is also about doing something about your current financial situation. If you want to get out of debt within a few months or a few years, stop taking in more credit. Be aware of what you are spending for and focus only on getting what you need in the cheapest ways possible.

5. Create a Spending Plan.

A spending plan can be very simple, consisting of one column that details your income and another column that details your expenses. By reviewing this plan monthly, you will be able to see which expenses to prioritize and which expenses can be reduced. Whatever money you save from these actions should go straight to your savings.

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