financial priorities
The ranked order of financial goals and obligations guiding spending and saving decisions.
Example
“Establishing financial priorities meant mortgage and retirement came before dining out.”
Memory Tip
PRIORITY — your spending should reflect what matters most.
Why It Matters
Financial priorities help you make intentional decisions about where your money goes rather than spending reactively. By establishing clear priorities, you can align your spending with your values and work toward goals that matter most to you while managing obligations responsibly.
Common Misconception
Many people assume financial priorities mean cutting out all enjoyment or entertainment spending entirely. In reality, priorities involve ranking what matters to you and allocating resources accordingly, which can absolutely include discretionary spending if that is important to your wellbeing.
In Practice
A person earning 5,000 dollars per month might rank their priorities as: emergency fund (500 dollars), debt repayment (800 dollars), housing (1,500 dollars), food and utilities (1,200 dollars), and entertainment (200 dollars). If an unexpected car repair costs 1,000 dollars, they can reference their ranked priorities to decide whether to pause entertainment spending or adjust another category rather than defaulting to high-interest credit.
Etymology
From Latin 'prior' meaning before — what comes first in your financial life.
Common Misspellings
Build a budget and track your spending
Related Terms
More in personal finance
Other personal finance terms you should know
See Also
Need financial definitions?
Clear definitions for 2,500+ finance, insurance, and investing terms.