Putting Your Financial Priorities in the Right Order
Most families are working toward several financial goals at once, such as retiring on schedule, helping the kids or grandkids, paying off the house, giving back, and keeping the farm or business strong for the next generation. October makes the question of what comes first feel more pressing. Year-end business decisions are coming into view, Medicare open enrollment begins mid-month, and Required Minimum Distributions (RMDs) must be taken by the end of the year. It’s easy to let the most urgent need decide, but urgent and important aren’t always the same.
Start with the foundation. First, make sure an illness, injury, death, or fire wouldn’t put your family’s finances in serious trouble; that’s the job of insurance. Business owners and agricultural operators should also consider what happens to their income—and the operation’s cash flow—if, for whatever reason, they are unable to work. Next, pay off high-interest debt like credit cards, which works against nearly every other goal. Then build an accessible cash reserve. Three to six months of living expenses is a good rule of thumb, though seasonal or uneven income often calls for more. Keep household savings separate from the farm’s or business’s working capital, so a lean quarter for the business doesn’t force you into high-interest borrowing at home.
With that foundation in place, retirement savings deserves high priority because it’s hard to fund any other way. Many goals can be financed with a loan, but retirement generally can’t. If your wealth is tied up in land, equipment, or an enterprise you’ve built, having liquid assets outside it means your retirement doesn’t depend entirely on a buyout, a successor, or commodity prices the year you step back. After that come other goals, like education funding or major home projects, followed by lower-interest debt such as a mortgage, where paying it off early is as much about peace of mind as math. Like anything, it’s about building a solid foundation and working up from there over time, but that initial base is key to long-term viability. When working with families on a financial plan, I always say that the one certainty is that the plan will change, because life always adds new challenges or variables we weren’t expecting. But having a clear picture allows us to make proactive adjustments when those changes occur—like managing year-end tax brackets around RMDs—and makes us far more confident in our decisions.
What is absolutely true is that everyone’s situation is different, so the right order for you depends entirely on your own variables. In retirement, the focus shifts toward reliable income streams, navigating healthcare costs, and tax-efficient drawdown strategies. Giving back also matters to most of the families we work with, whether through charitable gifting or supporting local organizations, so it may belong closer to the top of your priorities. The real value of a financial plan is showing how your goals affect one another, so you can decide with the whole picture in front of you.
If you’d like help sorting out what comes first for you or your family, we’re glad to talk it through. Let’s Get Started
