I’ve been writing here for almost 3 years and have already found a common thread in my money posts. That commonality is that I seem to change my financial priorities every few months, lol. I always knew that priorities change, but I didn’t understand how fast that happens. A year seems to fly by, but when I read back on what I’ve written about, a ton happens in each year. But we only seem to remember the super important stuff…the smaller things are forgotten and why time seems goes by so fast.
Priorities Update
Since this is technically a personal finance site (not just my own personal venting grounds, lol), here is my current list of financial priorities and the thought process behind the choices:
- Friends and Family
- Our business
- Mortgage payoff
- Retirement savings and investments
- Hobby jobs
- Our homes
- Our other property/stuff
Why These are My Priorities
Friends and family were my easy #1 since my life is based on the people in it. Yay for easy! The second easy choice was our business since it is my addiction as well as our primary source of income. Double yay for easy! From there on, it became tougher to prioritize.
We have two mortgages, one for our rent house with about $23,000 left on it at 4.5% and one for our current home with about $206,000 left on it at 4%. The pure mortgage payments total $1500 since we don’t escrow, but we do have to put $1000 aside per month for all property taxes, home insurance premiums, and home owner’s association dues (so $2500 a month in housing costs). Since we bring in $2300 a month in rent, these housing costs aren’t killing us, but I really rather not have $2500 in just housing costs for the next 30 years. So we are placing paying off the first mortgage as#3 and will have that taken care of by the end of this year. $500 off our monthly housing costs will be really welcome.
Our retirement savings and investments are still super important to us and only ended up at #4 because #1 and #2 were so easy and #3 is short-term. 
We are still aiming to be financially independent within the next 20 years (no later than 50). Right now, fully funding our Roth IRA’s is a necessity for us. The steps after that are more vague for us. I’m loving rental income and hubby does very well with high yield dividend stocks. We’re not sure what else we’ll tackle.
The rest of our priorities are pretty much at the same level for us. Mr. BFS loves being a football and softball official. We love our home and our rent house. We also enjoy the other stuff we own like our cars, our furniture, our kitchen stuff, our gadgets, etc. Luckily, these priorities sort of take care of themselves. Since Mr. BFS does love reffing, he’s great at it and stays employed. Since we love our homes and like our stuff, we take care of it. It goes hand in hand.
So, what are your priorities? And on a different note, what would you do if you were self-employed to prepare yourself for retirement?
For me it goes…
1) Family 2) Mortgage Payoff 3) Travel 4) Financial Freedom but I’m not self employed – if I was I’d have Business in at #2, just like you
Pretty similar to yours actually.. I would add that ‘having fun’ is a generic priority and that often we will do that instead of making overpayments! I don’t make any apologies or excuses for that
We’re retired and our main priority (after the people close to us) is keeping our investments on the straight and narrow. Normally that’s not a time consuming endeavor, because we rely on dividends which keep rolling in. But I have a few “play” stocks I like to change out a few times a year. When I’m lucky I change them out when they reach my targets, but every now and then I have to change them because I guessed wrong
It’s good to stop and reflect on these things.
For me:
1) Family (kids being most important)
2) Health
3) Finances
Somewhere in there, friends come into the mix too. Frankly, I think that I need to spend more time on health, and maybe (gasp) a bit less obsession with finances
Self-employed & planning retirement? Roth IRA would be a big part of the mix. I’d max the Roth first; then continue to salt the maximum possible in standard IRAs and then in brokerage accounts.
Mortgage payoff is huge, not only in planning for retirement but also in planning for catastrophic surprises, such as layoffs or (in the case of the self-employed) illness or accident that blocks you from paying work. A paid-for dwelling represents a return on investment of the amount you would be paying on the mortgage — so if your $200,000 house is costing you $1,000 a month in mortgage payments, getting out from under the mortgage “pays” you $12,000 a year, a 6% return on the value of the house. And when you don’t owe on a mortgage, it’s mighty hard for anyone else to take your home away from you.
And IMHO your blog’s title says it all: Budget for fun stuff. When you’re self-employed, it’s all too easy to devote every living, breathing minute to the business.
I’d have to put family first for sure, then paying off debt, then travel. Once the debt is gone, everything that isn’t for necessities and travel can be saved, so retirement will most likely be taken care of. Maybe you can get Mr. BFS to do a post about choosing dividend stocks. I’d love to hear his advice.
Family is our only priority. Not sure if its a financial priority, in that taking care of the house, cars, health coverage,food, and educational expenses takes care of Family.
2013 Financial Priorities
1. Health expenses
2. Maintenance of home vehicles, and everything.
3. Hobbies
4. Educational
5. Travel
6. Looking for bigger space, maybe new vehicle. (if something good pops up)
3 and 4 tend to become the same around here, lol.
Family is my number one priority. After that comes paying off all consumer debt, followed by the mortgage. I have us on a 5 year plan. I hope nothing comes up and changes that. I don’t even know where I’d begin if I were self-employed, which is funny, since that’s a goal of mine!
My priorities are:
1. Husband & Kids
2. New Health Changes
3. Debt Payoff
4. Emergency Savings
5. Education
6. Job Development & “Security”
7. Everything else, including the rest of the family and friends… does that sound harsh?
In just a couple of weeks, all of our not-so-big debt will be paid off and we’ll have just our mortgage ($100k/3.25) and a student loan ($13k/2.5%) to work on. We’ll have our $2k in emergency savings with a plan to place 50% of all “surprise” money into that same savings, as well. And it looks like we’ll still be able to function on about $2700/month, even though we’ll be saving about $300/month after that crappy debt is paid off. Looks like that might go into the “surprise” money category!
Thanks for the reminder to always keep priorities in check!
No question, family & friends was and is my top priority. I never missed any of my children’s events. I could still do everything else and did. When your priorities are in the right place, the rest is much easier.
Priority one is to enjoy life, always.
Financial priorities are the following this year:
Save up $30,000 down payment for house.
Contribute to retirement accounts.
After we buy a house financial priorities will be:
1. Max out my 401K ($17,500)
2. Max out ROTH IRAS ($11,000)
3. Start making extra payments towards mortgage (early payoff baby!)
Extra money will go to traveling, future small business fund (taxable investment fund), and living.
I think its very important every now and again to take these things and put them in order of priority as you see fit. It’s not always as easy as people think. I agree that Family will always be #1, but I personally would have put retirement up higher (since early retirement is ultimate goal for us).
If I were self employed, I would decide how much money I need for 1) the business and 2) for me to live off of. Beyond that, every dollar would go into whatever saving vehicle I felt was appropriate. I tend to side with my dividend stock category the most because it will help for that early retirement. I like the strategy you two are using with the rental houses. That should translate into steady income!
Our priorities are in the process of changing and there will be an update of it on my blog in the next couple weeks.
As far as retirement you should look into that self employed IRA or 401k that lets you put 25% of profit in a retirement account and take it as a business expense. I will be looking into that this or next year.
Your rental income is great! Also, I should talk to your husband about dividends:). I want to really delve into investing this year and really understand it better and do more with our portfolio (we’ve been maxing out Roth’s for years, but I am talking about outside of our IRAs).
Priorities are sort of similar – 1) Loved ones 2) Our business (we are self employed, so this has to be at the top of the priority list) 3) Retirement & other investments 4) Paying off mortgage (we are already on an accelerated payment plan with only $96K left to go) 5)Create a non brick and mortar business so that time off is easier.
Family always comes first. Well, it’s easy to manage your finances once you know what your priorities are. Then from there, you allot the necessary budget for each. Although, I think knowing which one to prioritize first can be a bit tricky.
Hi, first of all congratulations on a great and long running blog!
Just a comment around mortgages – for us in the UK any interest payments on rental properties are currently tax-deductible, meaning that although your home mortgage has a more expensive interest rate you may actually be better off refinancing so that as much debt as possible is on the rental and as little as possible on your residential
Not sure if you have the same tax opportunity, and of course restructuring mortgages isn’t always straightforward either! An intermediate step might be to put any money you are currently using to overpay your rental mortgage into your residential mortgage instead?
Perry
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