S&P 500   4,544.90
DOW   35,677.02
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S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
pixel
pixel
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S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
pixel
pixel
pixel
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
pixel
pixel
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Are you Prioritizing Your Financial Goals? Here's Why You Should and How to Do it

Wednesday, September 22, 2021 | Melissa Brock
Are you Prioritizing Your Financial Goals? Heres Why You Should and How to Do it

Even if you don't write them down, you probably have some financial goals — you know, save for a vacation, push money into a college fund, shovel money toward your retirement. 

Even if you're not normally goal-oriented, it's to your advantage to put a lot of thought into how you'll prioritize your financial goals.

Having a goal can even help you get excited about your future financial possibilities. In fact, a survey by Lincoln Financial Group showed that 46% of savers say they were excited about having enough money during retirement. On the other hand, a total of 35% said they were scared to save for retirement. 

Let's go over why it's important to prioritize your financial goals and why you should do it.

What Does it Mean to Prioritize Your Financial Goals?

What does it even mean to prioritize your financial goals? 

Prioritizing those goals involves tackling your finances in an order that makes sense. For example, let's say you have high-interest credit card debt. Ideally, your priority shouldn't involve saving for a trip around the world when you haven't paid off your credit card debt. (Anyone guilty?)

It means that from paying off debt to tackling retirement savings, you make the best, most logical choices as you go. 

Why it's Important to Prioritize Your Financial Goals

It's important to prioritize your financial goals because among the hundreds of choices you have about how to allocate your money, why not be intentional about it? For example, let's say you have $10,000 burning a hole in your pocket. You have so many choices with your money — buy a jetski, play blackjack in Vegas, invest it in an IRA, pay for a kitchen upgrade. 

The point is, what's most important? How will that $10,000 most benefit you financially? Being intentional about how you allocate your money helps you figure out your larger financial picture.

Prioritizing your financial goals can mean the difference between not paying off debt and getting rid of it forever. It can mean the difference between paying off your mortgage or keeping it around forever. It can mean the difference between your child taking out student loans — or not.

How to Prioritize Your Financial Goals

So, how do you actually prioritize? Many people aren't sure how they should approach it or what they should do first. Let's clear it all up.

Step 1: Outline your goals.

Make a list of all your goals. Even if you're the type of person who spends most of your time "winging it," you still have goals — you just might not realize it. Let's take a look at some popular goals:

  • Get out of credit card debt
  • Pay someone back who loaned you money
  • Save for a down payment on a house
  • Put money into a retirement account
  • Save for a child's college education
  • Take a dream vacation
  • Become completely debt free
  • Eradicate student loans
  • Pay off your mortgage
  • Put an addition on to your kitchen

Your list probably won't look like everyone else's — and it shouldn't. Maybe you even put "pay for a divorce" on your goal list! (Hey, it's possible!)

Take an hour or so to jot your goals down and continue adding to the list. It's great if you have a long list — that's what you want.

Step 2: Tackle high-interest debt.

When you take a look at all of your financial goals, many experts agree that paying off high-interest debt should make the top of your list. High-interest credit cards can cripple you if you only make the minimum payments.

For example, let's say you have a $2,000 credit balance with an 18% annual rate. You only make the minimum payment of 2% of the balance, or $10, whichever is greater. It would take you a whopping 370 months — just over 30 years — to pay it off! (And that's if you never added any more charges to your card!) 

Consider using the debt snowball or debt avalanche methods to pay off those debts. In the debt snowball method, you choose the debt with the lowest balance to pay off first. In other words, let's say you have a credit card at 18% interest with a $15,000 balance and $20,000 in student loans with a 4% interest rate. You'd pay off the lower principal balance first — the credit card — while continuing to make the minimum payments on your student loans.

The debt avalanche method says that you pay the debt with the highest interest rate first. In this case, you'd pay the credit cards first as well, at the much higher interest rate of 18%. Again, you'd pay your bills on time, but just focus on making the minimum payments per month.

Step 3: Zoom in on savings.

Sometimes it's hard to know whether to save or pay off debt. In some cases, it's smart to do both if you can afford to pay extra on your debt each month and contribute to a 401(k) or a 403(b) plan. You should contribute enough to get your employer's match. The most common employer match is 50 cents on the dollar on up to 6% of your salary. Experts recommend contributing 10% or beyond, up to the maximum contribution limit of $19,500 in 2021.

It's also a good idea to take your retirement savings allocation and put it toward a Roth IRA. You must meet specific income requirements. In 2021, single tax filers must have a modified adjusted gross income (MAGI) of $140,000 or less and those married and filing jointly must have a MAGI under $208,000.

If you have about a dozen savings goals, tackle an investment account next, particularly if you don't meet the qualifications for a Roth. You could also adopt a Backdoor Roth IRA strategy as well. 

Put Your Financial Goals in Order

When you put your financial goals in order, you take care of your financial health. A little secret: Once you actually put together a plan, it's easy to look toward the future with a positive outlook. You always feel better when you have a good plan, right?

If you're having trouble putting together a plan for your future, approach a financial advisor who is a fiduciary to help you. 


7 Retail Stocks to Buy After Strong Quarterly Earnings

Earnings season follows a predictable pattern. Bank stocks report first; then big tech stocks weigh in. And now, late in earnings season, we hear from the retail sector. Investors were expecting strong numbers and, for the most part, retailers delivered.

However, for some retailers, this may become a “sell the news” event.

That’s because on August 16, before the big-name retailers reported, the U.S. Retail Sales Report showed a 1.1% decline in retail sales in July from June. So while retail sales for the last two quarters will be strong, investors are wondering if the sector is entering a period of slowing growth. Concern about the Delta variant perhaps bringing more restrictions to the retail sector adds to the concern.

However, sectors don’t move in lockstep. In every market, there are strong performers even in tough economic conditions. This was true during the pandemic. And it’s true in the recovery. Summer is traditionally a slower season overall for retail. The July numbers probably do not reflect all of the back-to-school purchases. And, of course, stores are already beginning to prepare for the holiday season.

View the "7 Retail Stocks to Buy After Strong Quarterly Earnings".


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