We may all have several financial goals and aspirations, but how do we decide how to order our financial priorities? Should we pay off debt or build an emergency fund? Should we be saving for our children’s education or for our retirement?

A starting point is to identify your goals, both short-term and long-term, and write them down. Work out how much you need to achieve these goals. Don’t be scared by the big numbers. Small but consistent steps will get you there.

You don’t need to start saving for all these goals at once, but you do need a strategy that you can implement over time. It is also important that your long-term goals are not sidelined by short-term or more immediate goals.

Not sure how to set your financial priorities? When we put our candidates through the Absa | City Press Money Makeover Challenge boot camp, we always start with the following steps to set them on their journey:

1. Get to grips with your money: do a spending analysis.
2. Debt vs emergencies: given the high interest rates on short-term debt, it makes sense to try to pay off these debts as quickly as possible, but you still need to create an emergency fund to protect yourself against unexpected expenses that so often crop up.
3. Debt repayment strategy: most of our candidates have opted for the snowball method, in which you settle your smallest debt first.
4. Short-term vs long-term investments: creating your own financial plan.

Retirement: Even while paying off debt, our candidates were encouraged to continue to contribute to their retirement funds where possible. While saving for retirement may feel like a “luxury” when you’re struggling to pay off debt, you benefit from compounding over time.

Medium-term goals: Several of our candidates have medium-term goals they wish to achieve in the next 10 to 15 years. These include saving for children’s tertiary education and having their own business one day. Before investing in these goals, you should first focus on building your emergency fund, paying off expensive short-term debt, and keeping up with existing retirement contributions.

Short-term goals: Buying a home is a common financial goal for a young person. Saving up the deposit and transaction fees is an important part of their short-term goals. However, before you start planning to buy a home, you need to pay off your short-term debt. This helps improve your credit record and, once those debts are paid, you will have the additional cash flow to save for a deposit and, ultimately, pay for a home loan.

Head over to the Money Makeover website to read more about the financial priorities of our candidates, and how they can create a financial plan to help them achieve their goals.