When you get to work each day, do you make a list of the things that you need to get done in the order of their priority? Or, if you're overwhelmed with projects, errands and other nagging little tasks that you need to get done, will your boss ask you prioritize things so that you can efficiently and productively do your job? Indeed, without the process of prioritizing, many of us would faithfully get absolutely nothing done of note – and this on a regular basis.

Prioritizing where your money's concerned is no different – and no less important. If you've bitten the bullet and crafted a reasonable household budget, then you've already taken the most essential first step in achieving financial security. But, no matter how financially sound a budget might be, not exercising the discipline to respect the priorities set and adhere to the imposed spending limits will relegate the value of that budget to less than the paper it's printed on.

Today, the prices of food, housing, gas, clothing, healthcare and medicines are steadily rising. Not just countries, but we as a world are staring down the barrel of inflation. Nevertheless, the well-being of your family must come first and, as such, your daily living expenses, such as mortgage (or rent) and utility payments, groceries, clothing and transportation are priorities that simply cannot be bypassed. Your family's physical health is also a priority that's at the top of the list. Any preventative measures that you can take to keep your loved ones healthy now will decrease the amount of money you could have to spend later on. Life insurance, health insurance, credit-card- and other debt payments, tuition for the kids, investing for retirement and all the other necessities that you have listed on your budget are important, as well.

But, there is another component of the household budget that also needs to be addressed. It's a priority that most people do not consider to be particularly important (if it's considered at all), and it's known as savings – specifically, an emergency savings fund to guard against unforeseen situations.

Regardless of your personal circumstances – whether you're young or old, in ailing health or as strong as the proverbial ox – having a savings account as a financial cushion is a very important and wise priority. Most pundits agree that a sum equal to three- to six months of your household's income will give you the breathing room you'll need should someone lose their job or if a loved one becomes seriously ill.

Certainly, that sounds like a lot, especially if you're living paycheck-to-paycheck, but it's actually not as much as you might think. There's no need to try to save that amount of money immediately, it can be done over time. You can start by arranging to have a certain amount deducted from your paycheck and placed into a savings account, just as you arrange for your retirement plan. (If you never seem to have enough money to funnel into a savings account, indeed this may be the means that you've been searching for.)

Prioritizing your money might be a bit difficult from time to time, but it's also very doable. While there may be sacrifices, knowing that you've got things under control will keep stress away and bring you peace of mind – the only type of peace of mind that money can buy.


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