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Goals, Priorities and Budgets

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Talking About Our Goals

Sarah and I were having a chat the other day regarding our financial goals which inspired me to write about the importance of goals in making financial choices.  There is also a difference between a financial goal and financial priorities.  The terms GOALS and BUDGET get misused quite frequently.  Too often, priorities don’t match up with either which is where you can run into problems with satisfaction in your life.

Financial Goals

A goal is more than a destination.  As simple as it might be, it means nothing to say “My goal is to pay off my mortgage”.  The assumption is that eventually you will pay off your mortgage so that equates to a meaningless throw away statement.  A goal needs to be specific.  “My goal is to pay off my mortgage in 10 years”.  Now are getting somewhere.

Even a specific goal means nothing if it is just the destination though.  A goal needs to be backed by an action plan.  If your goal is to pay off your mortgage in 10 years but you are currently on track for 20 years you need to make a change to reach your goal.  “My goal is to pay off my mortgage in 10 years by increasing my payments by 10% per year”.  This is a great goal.  A specific goal with an action plan is still meaningless without the action.  A goal needs to be prioritized.

Financial Priorities

Financial priorities are the weight you put behind your various goals.  That’s right…goals – plural.  You can have multiple goals each with a specific plan but your resources are finite.  When you set goals for yourself you have to figure out not only how important that goal is but also how urgent it is.  “My number one goal is to pay off my mortgage in 10 years.  I will so this by increasing my payments by 10% every year.  This is important because I work in an industry that may be made redundant within the next decade and I will need the flexibility that being mortgage free provides”.  Long-winded but specific, backed by an action plan and prioritized with urgency.  Since that is the number one priority, it should hold the largest amount of resources.

A goal can change over time, as you mature it is only natural for things to change in your life. What seemed important in the past now doesn’t fit.   Even if a goal doesn’t change the urgency changes, your priorities then shift.

For example – take home renovations.  Your goals could be as follows:

  1. Finish basement before Christmas because I have family coming over and I will need the space for entertaining. As soon as the hardware store has there 20% sale I will get my materials and work on it evenings and weekends.
  2. Install hardwood on 2nd floor next spring because the carpet is in rough shape and long-term I’d prefer hardwood.
  3. Renovate bathroom in 2020 because it is ugly and I don’t want to look at it for much longer.

Specific goals with various levels of urgency = priorities!

If you get a report that your furnace is likely going to need replacement in a couple of years – that will likely take priority over at least the bathroom if not the hardwood.


A budget relates to both goals and priorities.  A budget serves as a tool for achieving your goals.  “My goal is to save $3,000 by May so I can attend my friend’s destination wedding.  To achieve this I am going to dedicate $400 every month to saving for the trip”. By allocating money in your budget towards your goal you have an action plan that will work.

Your budget is also a snapshot of your priorities.  Where you put your available resources should line up with where you want to focus.  This isn’t strictly a matter of the amount – you may pay more for your mortgage than you do for vacation but if you have any extra money where you put it really reflects on your choices.

Goals are very important; they help guide us towards what we truly want.  They need to be specific, actionable and have a level of importance.  Priorities help us have multiple goals, organized by level of importance.  Budgets can be used as a tool to employ that organization.

What is your number one goal (top of your priority list), and is it specific enough to really get done?


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