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One of the reasons that many of us become unhappy with our financial situations is due to the fact that in many cases we aren’t spending money in a way that is in line with our priorities. When your financial priorities don’t form a basis for your spending habits, it can be easy to wonder where the money went — and be disgruntled about how little is left over.

If you want to bring your spending in line with what’s important to you, it is vital that you establish some financial priorities. Here are some steps that can get you thinking about what’s important financially:

1. Determine what’s important to you: The first step is to think about what’s most important in your life. Whether it’s charity ^[3], travel, providing experiences for your kids, making sure you contribute to your church, enjoying a latte every morning, or some other expense, be honest about what you find important. Quickly rank the importance of the items on your list. (30 seconds)
2. Decide what you want your money to accomplish: Your money should be working for you. It should be a tool to help you reach your financial goals. Figure out what you want your money to do for you now, and in the future. This can include providing you with a comfortable home, and also providing you with the chance to travel when you retire. (25 seconds)

This quick exercise will help you establish your financial priorities. Your financial priorities should stem from the items that are most important to you. Look at your ranking of expenses, and look at your financial goals ^[4]. Now, look at your spending. Does the way you use your financial resources actually match your proclaimed priorities and goals? If you think it’s very important to set money aside for retirement, but eating lunch out is close to the bottom of your list, it doesn’t make sense to eat out every day — especially since you could put that $5 to $10 a day in your retirement account and watch it grow.

Be brutally honest with yourself. I think it’s very important to tithe, so I actually pay my tithing first thing — rather than waiting until the end of the month, or waiting to see what’s left over. I have specific retirement goals, so I have the money automatically deducted from checking, rather than contributing if there’s enough. I like eating out. To me, it’s a priority to eat out four or five times a month. It’s not too important for me to buy new clothes. So, rather than spending my money on new outfits, I make sure I have enough to eat out.

All of my spending is ranked, so that if I run out of money before I run out of expenses, the least important items just don’t get bought. While I enjoy a pedicure, I might not get one some month because our food costs were a bit higher due to company (entertaining company is higher on my list than pampering myself). However, I don’t feel too bad about it because the things that are most important to me are usually covered. I think it’s much easier to be content in your life when the things you deem most important are paid for.

(Photo: CarynNL ^[5])