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How to Manage Your Financial Priorities

Conquer your student debt. Refinance now.

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When I was a kid, my dad used to always give me the same piece of advice: you need to get your priorities straight. He usually said that if I chose to watch TV instead of doing homework or play basketball when I had a paper due. 

When I grew up, I realized what he meant. When you have multiple competing desires, the only way to figure out what’s right for you, is to prioritize. 

As a recent college grad, I decided my main financial goal was to pay off the student loans I took on for my college education as quickly as possible. I wanted to be debt-free within three years, even though I was only making $30,000 a year, and get my personal finances in order. To do that, I had to cut out most of my discretionary living expenses in the short-term. Unfortunately, that included going out and eating at restaurants.

Some of my friends understood that I was prioritizing my debt payments and long-term goals, but I also got shade from others. One time my boss, upset that I said no to another lunch invitation, asked, “Don’t you ever have fun?”

Managing your financial priorities is a personal decision, and one that only you can make. Read below to find out how to do it while making your loved ones understand.

Come Up with an Alternative

A frugal friend of mine told me she was sick of her girlfriends constantly inviting her to brunch on the weekends, which typically cost between $10-$15 every time. She didn’t want to spend the extra money, but hated rejecting her friends.

She came up with a compromise that fit her financial life: potluck brunch at her house. She made a simple veggie frittata and asked people to bring over a side, like bacon, fruit or biscuits. One of her pals later thanked her for the idea, saying she’d been spending too much money on restaurants lately.

When I was paying off my student loans and living on a lean budget, I invited friends to watch Netflix with me. We’d spend a good hour catching up on our day and then watch “Sherlock” or “Game of Thrones.” It was free, fun, and just as entertaining as sitting in a bar for a couple hours.

If you’re the frugal one in your friend group, it’s up to you to offer alternatives that fit in your financial plan. Look for free or cheap events nearby. Be the one to send out invites for potlucks, BYOB parties, or game nights. 

Even if you think your friends will never choose a homemade dinner over a night out, you should still ask. 

You should also go along with their ideas when you can, even if your first priority is building your savings account or paying down high-interest debt. If possible, set room in your budget for lunch or dinner out with them a couple times a month. Compromise is a two-way street and you can’t ask for something you’re not willing to give.

Be Honest 

Honest, open communication is the first place to start when reconciling your priorities with your loved ones’. You don’t have to explain in a 500-word email exactly why you’re skipping out on a bachelorette party or Thanksgiving, but a sentence or two can help. 

No matter what your financial priority is, whether it’s saving for a new house, paying off debt, or retiring at 45, be honest when explaining why you don’t want to do something. 

Don’t say, “I can’t afford it” if you earn as much or more than your friends. They’ll see through that lie and will press you for another reason. Instead, tell them specifically why you’re not going on a group trip or why you don’t want to splurge on a nice dinner. When I was paying off my student loans, all of my friends knew why I didn’t go out to the bars very often. I don’t know if they understood or agreed with my reasoning, but at least they knew.

When you do give a reason for not participating, be prepared for backlash. Some people won’t understand why you’re skipping their wedding and might resent you for it if they find out it’s because you’re saving 40% of your income. Others might feel like you’re picking money over relationships. If possible, always explain your reasoning and help the person understand.

Don’t Force Others to Make a Budget

I have a hard time not shouting from the rooftop about my debt repayment strategy. I want to give my friends financial advice whenever they mention their student loan debt, credit card debt, or needing an emergency fund. But being financially responsible is like being a vegan around meat-eaters. Sure, you might think you’re being helpful when telling your friend to order a salad instead of a burger, but they won’t appreciate you trying to be their financial planner.  

This isn’t to say you shouldn’t tell people about your strategy, just don’t try to force your friends to follow your savings plan.

Here’s an example. I have a friend who always carries a credit card balance. It’s not because of a medical bill or an emergency expense, she just likes to shop and enjoy herself. When we’re together, I’m always tempted to give her a lecture on how much she pays in credit card interest every month and the impact this has on her credit score. But I don’t. She knows that she has a credit card balance. She’s probably even aware of the high-interest rate she pays because of it.

Let the people in your life make their own choices. Just like you’d want them to respect your financial decision, you have to respect theirs, even if you disagree with it.

Conquer your student debt. Refinance now.

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Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.