How do you feel about your spending? Most of us would probably say that we wish we had more to spend! But, given what you have, are you satisfied with your spending habits and patterns? Do you feel like your spending is accomplishing what you want it to?
It’s possible to have a working Spending Plan, track our spending and stay within the plan each month, and still feel like we’re not accomplishing our goals. Often, that’s because the numbers work, but they don’t reflect our key priorities. Our spending isn’t aligning with what we really value.
Here’s the thing: We can spend a dollar any way we want, but we can only spend it once. So, if we spend it on a nice vacation, then it’s not available for eating out. If we spend it on our house, then we’re not saving it for retirement. So we need to make some decisions. If you’ve created a Spending Plan, then you’ve probably already had some experience with managing trade-offs. In this article, we’ll take that a step deeper and consider the priorities behind those decisions. We’ll outline a process to help you think through your values and spending priorities.
Ask the Right Questions
It can be tempting to start asking questions with the numbers: “How much do I need for utilities? What’s my average grocery bill?” And for creating the Spending Plan, these are the right questions to ask. But to determine your priorities, you need to take a step back and ask more foundational questions. What’s truly important to you and your family? What are the most important things you want to accomplish with the resources God entrusts to you? What would you need to accomplish with your spending in order to feel successful? What would make your life feel incomplete if you didn’t have it?
Understanding your priorities starts with asking the right questions. In this article, we’ll suggest some questions you can ask to begin to discern what’s important to you. We’ve divided these into several major categories, but feel free to add some categories of your own. Think of these questions as thought-starters. If you wish, you can download the form at the bottom of this article to help you organize your thoughts.
One final note before we get started: No one else has the right to determine our priorities, and we have no right to determine the priorities of others. Each of us needs to wrestle with these before God. That said, there may be times where wisdom would lead us to seek the counsel of trusted friends, family, or advisors.
For the Christian, generosity is not an option. Giving is a key aspect of loving God with all our heart, mind, soul, and strength. Jesus said that we can’t serve both God and money; we have to choose. He exhorted believers to store up their treasures in heaven rather than on earth (Matthew 6:19-24).
Scripture repeatedly emphasizes the benchmark for giving as a tithe, or ten percent of gross income. However, not everyone is in a position financially to get to that goal right away. And some who are already there should be considering whether God is blessing them financially in order to use them as even greater channels of his blessing to others. Giving characterized by gratitude, cheerfulness, and faith in God’s provision is the kind of generosity that God is looking for.
Here are a few questions to guide your thinking about priorities for generosity:
- Does my giving reflect the Biblical guideline? If not, is it a priority for me to get there?
- Are there any additional organizations or causes that God has given me passion for?
- Are there needs that God brings regularly across my path?
Our goals and values around family have perhaps the broadest impact on our overall financial priorities. Most of our largest financial commitments, such as housing and education, are impacted by our family priorities. Here are a few thought-starter questions to help you think through how your family priorities might impact your finances:
- What size family do we have or want to have? Do we need to be able to take care of other family members (e.g., aging parents)?
- What size house do we need to support that size family?
- Will children go to private or public school? Or will we homeschool? Do we need to live in a specific school district?
- How important is it for the children to go to college? What do we feel is our responsibility to financially support a college education?
- How important are children’s activities? How many do we want to support? How important is it that we (parents) be present at children’s activities?
Many of these questions impact other decisions to be made. For example, if it’s important to be present for children’s activities (such as sports), then maybe we don’t take that promotion that requires more travel. If we need to care for aging parents, that impacts where we might live and what kind of house we might need.
Work is another far-reaching priority area, impacting other areas such as location and experiences. Obviously, work contributes to the earning side of the financial equation, where other areas contribute to the spending side. Some decisions may serve to restrict earning opportunities in various ways, while other career-based decisions may impact other areas of life, including key priority areas. Here are a few questions to think through:
- Are we committed to having one parent at home, or do both spouses want to pursue careers?
- How much travel and/or overtime do we want to undertake?
- Do one or both of our careers require frequent moves?
- Are we trying to build a business?
- Is work-from-home a priority?
Lifestyle & Experiences
What lifestyle characteristics are important to our family? What experiences do we want to have? This shouldn’t be a wish list of everything we’d like to do but rather a narrower list of the lifestyle and experience elements that are important enough to us that we would make sacrifices in other areas in order to afford them.
- Are there specific types of family vacations that are important?
- Do we want to emphasize family dinners at home?
- Is it important to entertain and/or eat out often?
- Do we have any hobbies or passions that are important enough to be priorities?
- Are there key health/fitness/nutrition priorities for our family?
- What volunteer opportunities do we want to pursue and how frequently?
For most of us, a home is the largest financial decision we’ll ever make – and it’s one that most of us will make more than once! As a result, ensuring that we understand our priorities for location is a crucial contributor to financial freedom. Many key factors impact this decision, some of which are included in the above lists. Here are some questions to ask:
- Do we need to locate near family? Near a specific job? Near our church?
- Is school district a factor in our location?
- What size house do we need to have to support our family and priorities?
- Is it a priority to be an urban, suburban, or rural area?
Narrow the List
As you think through your priorities, does your list look kind of like a child’s Christmas wish list?
If so, the next step is a critical one for you: narrowing the list. We said before that we can spend a given dollar only once. And most of us don’t have unlimited dollars. That means that when we opt to make something a priority, we’re choosing to leave something else behind.
At the end of this exercise, you need to have a list that you can actually support financially. So you’ll have to be realistic about what you keep and what you leave behind. Be sure that the things you end up with are truly the most important. To help with this, follow these two steps:
- Identify and manage conflicts.
- Highlight your non-negotiables.
Identify and manage conflicts
If you’re like most of us, your priority list has some direct conflicts. These are not just conflicts due to competing for the same financial resources, but conflicts in the priorities themselves. You need to adjust and manage these conflicts as part of narrowing your list.
For example, if it’s a priority for you to have the children involved in a lot of activities and it’s important for both parents to be at those activities, then one parent having a job that requires a lot of travel or overtime raises a conflict. How will you determine what’s most important? Will you settle for one parent being at the activities? Restrict the activities more? Or prioritize a job that doesn’t require as much travel or overtime?
If you’re committed to living on one income and having one parent stay home with the children, but you’re also committed to the expense of private school for your children, that’s likely a conflict. How will you manage that? Will you have the stay-at-home parent look for a job opportunity that allows full-time remote work? Or will you have them start working after all of the children are in school?
If travel is important to you but you’re also caring for aging parents, you’ll have to figure out how to balance those priorities. Will you postpone travel for a few years while caring for parents? Have family members come and care for your parents occasionally to give you a break? How does this impact your list of priorities?
Highlight your non-negotiables
Chances are, you’ll have to cross some things off your list in order to resolve conflicts. But your list may still be too large to support financially. This final step will help you narrow that list to hopefully manageable proportions.
Going back to some of our opening questions, what are the things on your list that are “must-haves” in order for you to feel that your life is meaningful? What are the things that, if you could have them, you’d say “no” to other things in order to get them?
Looking over your priority list, make a separate list of just the most important items. You could do this in a number of ways. You might start by starring the top 2-3 items in each category. Or you might try to rank the items in order of importance. The important thing here isn’t how you narrow the list – it’s that you narrow the list to a manageable number of priorities that you can actually support financially.
One key question to ask as you narrow your list is whether there are some things that you consider important but maybe can be pursued at a later time in life. For example, many couples postpone significant travel until the children have left home or until they retire. Are there things in your priority list that can be pushed out?
Keys to Success
At the end of this exercise, the goal is to end up with a list of non-negotiables that, if you’re able to achieve them, will lead to a meaningful life. These goals all have financial implications, because nearly everything we want to do costs something. But they also have impacts far beyond our finances. In fact, the primary considerations aren’t financial – they’re a sense of the priorities of our lives. Financial realities simply impose boundaries or restrictions on what we’re able to pursue.
Although this exercise is not complicated, it’s also not easy. Setting priorities requires us to make difficult decisions. To maximize the effectiveness of this exercise, follow these tips.
For the believer, our primary desire is to honor God in our lives. As a result, key decisions (and life priorities are one of those!) should be pursued in prayer. James tells us, “If any of you lacks wisdom, he should ask God, who gives generously to all without finding fault” (James 1:5). We need to approach this exercise with humility, with surrendered hearts, and with prayer for guidance.
Proverbs 16 advises us: “Commit the Lord whatever you do, and your plans will succeed” (Proverbs 16:3). And again, “In his heart a man plans his course, but the Lord determines his steps” (Proverbs 16:9). We need God’s guidance not only because we want his priorities to be ours, but also because he sees the future and we don’t.
This doesn’t mean that we can only pick priorities that have to do with missions! God gives us every good gift to enjoy (James 1:17; 1 Timothy 6:17). He wants our lives to be full of meaning and enjoyment. At the same time, our lives are about more than just our own pleasure. Prayer is one key to finding the balance.
Work with your Spouse
If you’re married, you dare not determine the priorities for your marriage and your family on your own!! You probably know that by now.
Marriage counselors often report that the most common source of stress in a marriage is finances. And a large part of the reason for that stress is that each person approaches finances with different assumptions – assumptions they don’t discuss.
The best way to work through this exercise together is to start separately. That’s right, work through your own list and have your spouse work through theirs. If you start the work together, you will each be influenced by the other person’s priorities – in ways both subtle and not-so-subtle. Empower each person by working separately; this is one way to say to the other spouse, “I value your priorities as much as I value my own.”
Then come together to discuss your non-negotiables and other priorities. You’ll probably get some eye-openers! Maybe one spouse assumes that the children will attend private schools while the other plans to home-school. This could lead one spouse to put a priority on living within a certain distance of good schools, while the other spouse may not consider schools in looking for a house. (And if you’re wondering how much of a difference this makes financially, compare similar houses in good and bad school districts!)
This is worth taking time over, so don’t rush it!
Flex with Time
Like a Spending Plan, your list of non-negotiables and other priorities is there to serve you, not the other way around. This is a living document and will change over time. Early in your career, maybe priorities around work take precedence; as time passes, possibly priorities around family begin to take center change and then maybe priorities around lifestyle and experiences.
One of the implications of this is that you don’t have to pursue all your priorities at once. As we mentioned earlier, even some non-negotiables may not need to be pursued right away. Give yourself the freedom to flex your non-negotiables and other priorities so that you’re always addressing the most important things with your finances.
The Spending Plan Journey
Your Spending Plan should reflect your priorities, especially your non-negotiables. But while this is the goal, it may take you a little while to get there. If you’re saddled with credit card debt, for example, you probably don’t have the money to pursue many of your priorities at this time. If you’re paying off school loans, maybe you’re not able to afford private school for the children just yet.
Don’t despair! This is an area for both faith and perseverance. But having determined what’s really important to you, recall this list every time you go to make a significant purchase. Do you really need to replace that sofa yet? Or could you use that money to retire some debt and free up finances for your non-negotiables? Is the extra money for that upgraded car worth postponing something on your non-negotiable list? Once you know your priorities, you’re in a better position to consistently pursue financial freedom and to honor God with all that he has provided.