Which comes first? The chicken or the egg? In this case, do your priorites come first, or does your financial situation dictate your priorities?
Take a look at the video below and find out what to do.
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Hull Financial Planning Personal Finance FAQ Series: How Are Our Priorities Dictated by Our Financial Situation?
The transcript follows.
You should always know what your priorities in life are regardless of your financial situation. You could have more money than Bill Gates, Warren Buffet, and Carlos Slim combined but still not want to waste money. After all, money represents an exchange of value for what you created and added to the world.
Still, with limited money, you must be very focused on your priorities. I group them into four categories:
- Obligations to yourself: this includes food, shelter, transportation, and clothing. I include your immediate family in this.
- Obligations to your family: this includes parents and siblings.
- Obligations to others: this is debt. You gave someone your word that you would pay them back for money that you borrowed. Your integrity rides on keeping that promise. If we can’t rely on human interaction and interchange, society breaks down. This includes keeping our promises.
- Things which are important in your life. These would be your longer-term goals which will make you fulfilled in your life.
It’s not until you take care of your obligations that you can start to spend money on your dreams and goals.
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