Conflicting priorities are at the heart of much of our everyday lives. We have a long list of things we know we should get done, but with limited time, resources, and energy. Unfortunately, family finances often fall to the bottom of the list.

This is a problem because our own financial picture and family goals probably look different than someone others. As a result, we need take steps to make sure our own goals are getting done, and in the right order.

As you think about how to prioritize your own financial decisions, here are some guidelines to consider.

Ask Yourself: What Do I Value?

Eric Liddell (image cropped) By unknown (Sports event handout)[1] [Public domain], via Wikimedia Commons

The Oscar-winning film Chariots of Fire portrays the life of Eric Liddell, a Scottish athlete and Olympian. Liddell, the child of devout Christian missionaries, came from humble beginnings, but he had an incredible gift: he could run--fast! (Is the Chariots of Fire theme music playing in your head yet?)

Liddell qualified to compete in the 100-meter race of the 1924 Summer Olympics in Paris. However, upon discovering that the race would be held on Sunday--a day he considered sacred--Eric refused to participate.

He instead trained for and competed in the 400 meter, an event for which he was initially ill prepared. In a stunning victory, Eric Liddell won the race.

Liddell had claimed victory in an event that wasn’t his own, but more importantly, he didn’t allow his hope of professional achievement to get in the way of his deeply held values.

Prioritizing your finances should begin with your values. Where do you find the most fulfillment and worth in life? Is it

Providing comfortably for your family?
Promoting a particular social cause?
Religious or community involvement?

Before establishing goals, first consider your values. Values are your best guide to worthwhile financial goals--whatever that might mean to you.

What’s “Good for the Goose” Isn’t Always “Good for the Gander”

Your values may be completely different from someone else's. How your financial priorities are ranked will be different as well. A typical family’s financial goals might look like this:

Build a $25,000 emergency fund
Get enough life insurance coverage
Save enough for a comfortable 30-year retirement by age 65
Max out our HSA each year
Pay for at least one year of schooling for each of our kids

But you’re not typical! Another family might look entirely different from the first:

Give away 30% of our annual income to charitable causes
Pay cash for our home
Always be working (no “retirement”), even if it’s “half-time”
Form a series of businesses over 20 years to be inherited by our kids
Achieve financial independence by age 50

As a financial planner, I don’t see much wrong with either list. A planner's job is never to impose his or her values on someone else, but to help others understand their own values and then prioritize their finances around those values.

Three Priorities Every Family Should Have

Given the previous section I’m a little hesitant to write this, but I believe that in 99 out of 100 cases, there are a few priorities that EVERY family should have at the top of their list.

Build an emergency fund

Did you know that 6 in 10 Americans don’t have $500 in savings? In most cases, families will instead turn to credit cards if cash isn’t available. While credit card debt isn’t the end of the world, it can form bad habits, credit worthiness issues, and cost a lot of interest. It’s best for most families to have an emergency fund set aside to handle emergencies--especially large, unexpected ones.

Get some life insurance

I’ve beat this drum more times than I can count, so I’ll just say this: If you’re eligible for life insurance and you’re not yet financially independent, you should have at least some coverage. Your family will be financially protected from your untimely death, and the coverage will bring peace of mind, allowing you to focus on your other priorities with less fear.

Have at least catastrophic medical insurance

We’ve all seen the rampant increase in medical insurance costs over the last several years. There isn’t much sign of it slowing down either. Situations like these can motivate some people, especially the self-employed, to simply go without medical insurance. This is a terrible mistake. A medical emergency, severe accident, or even a broken bone or two can lead to financial ruin. Trust me, I’ve been there. Make sure medical insurance for you and your family is in place.

I don’t know about you, but protecting the immediate well-being of myself and my family are at the very top of the list--they are what I value the most! If you feel the same way, then keep these three priorities top of mind, before any other goals are set.

I hope this article has been helpful to you. There is a lot of talk in professional, community, and family life about setting goals. I don’t hear nearly as many conversations about values. Knowing our values makes the process of prioritizing our financial to-do items easier and more meaningful.