Having a clear vision of your financial priorities can help you navigate the current pandemic and achieve your future goals.

By Raya Reaves, Founder of City Girl Savings

“Sponsored by Regions Bank, Member FDIC. All thoughts are my own.”

No one expected 2020 to be the year of a global pandemic. But here we are. The state of our economy and the situation we’re all facing shines a bright light on the importance of financial security. When things shut down, when people lose their jobs, when students can’t walk into a classroom, we need to know things will be okay. Definitely check out the article Financial Planning Tips During Tough Times.

You may not be in the “working” world just yet but pinpointing your own financial priorities as soon as possible can help you make the right decisions in the present and down the line. If you’re unsure about what finances mean to you, don’t worry. I don’t want this subject to scare you off. That’s why I’ve put together a list of 5 questions you can ask yourself right now to assess your true financial priorities. When you know what your financial priorities are, you can start living a life that helps you move in that direction. These questions are more important now than ever before. With a pandemic in the midst, you’ll want to understand your true priorities, so you can make decisions that will help future you!

1. “Where Do I See Myself in 5 Years?”
The first question I want you to ask yourself is where you see your life in exactly 5 years from now. Don’t be shy! Think about what you would truly want your life to look like. Are you working at a Fortune 500 company? Are you married with kids? Do you own a home? I want you to think about what your best life would look like in 5 years. I know that may seem hard to do as a college student but thinking about this now will pay off in the future.

Don’t worry about how you’ll get to this best life, just think about what it is. This is the first step to figuring out what’s truly important to you. When you know what’s important to you, you can make financial decisions that keep you in line with those things. You get extra bonus points if you write your response on paper – as if it already happened!

You could date a letter to yourself, exactly five years from today, and share with your current self what life looks like. You have everything you could ever imagine, and you’re writing as if you already have it. This exercise sends a signal to your brain to act as if you already have it. You may not be aware of it, but you’ll start acting like future you. Revisit this letter to yourself often, to keep you on track! Referring back to your future wants will help keep your financial decisions in check during COVID-19.

2. “Am I Willing to Sacrifice Fun Now or Fun Later?”
Now that you have an idea of what you want your future life to look like, it’s time to ask yourself if you’d rather enjoy your life right now or if you’d rather enjoy your future life. There isn’t a wrong answer. It’s all about figuring out what’ll work best for you.

If you would prefer to have fun now, instead of the future, you need to understand what that could mean to your future self. Obviously, nothing is guaranteed. That very well could be your thought process for wanting to enjoy as much as you can in life right now. But, what would that mean for your future self? If you’re spending all of your money now, it’s going to be harder to control those habits in the future. It’s also going to be hard to start from scratch. You may be feeling the pain of not having the fun you’re used to right now, but your time will come. Use this as an opportunity to practice self-control. It will help your budget in the future!

If you prefer to have fun in the future, instead of now; you need to understand what that means to your present self. It means you’ll be saying “no” more than you say “yes.” It means that you’ll be staying home when your friends are out spending money, taking trips, or dining out all of the time. Your bank account will thank you, and your habits will be formed around you saving instead of splurging. However, try to find a slight balance, just for your sanity!

It doesn’t quite matter which option you go with but becoming self-aware as a student can help you make better decisions right now and in the future.

3. “Am I More Reserved or Financially Free Spirited?”
Another important question to ask yourself while you’re in college: are you naturally a spender or a saver? When you’re more financially reserved, you’d prefer to keep your money – you’re not out spending it all the time. When you’re more financially free-spirited, money often leaves you quickly. Most likely, if you consider yourself financially reserved, you answered the question above as having fun in the future. On the contrary, if you’d rather have fun in the present, you’re likely a financial free spirit.

Again, neither answer is wrong. It just helps you understand yourself, so you can make adjustments where necessary. If you’re financially reserved, try to dig a little deeper with yourself. Why would you rather keep your money? In times like these with a pandemic happening, being reserved is a very good thing. Adjusting your budget to keep the non-necessary spending as low as possible can make a huge difference. Read How to Create a Monthly Budget for some tips!

If you’re financially free spirited, I also want you to figure out why. Getting to the true answer can help you make better decisions while you’re in college, as well as in the future. Financially free spirited isn’t bad, unless you can’t afford it. It will be harder to keep that up when you’re experiencing a time like the COVID-19 outbreak. You’ll know you shouldn’t spend, but it will be difficult to control it. Prepare yourself ahead of time by budgeting for the most important things. You’ll have the chance to get your wants, after the pandemic! Also, don’t forget to refer back to your future self to keep you focused on controlling your spending.

4. “Do I Value Time or Money?”
What sounds better to you: experiences or stability? Traveling or money in your bank account? Of course, you can have both, but what’s most important to you? The answer to this question is important because it will dictate how you’ll want to work in the future. If you value time, you won’t want to be spending all of your time working. You’d rather be out and about, experiencing things or spending time with those you love.

If you value money, you may not mind putting in the extra hours. You may be okay with starting a business that requires long days. The work is worth it because it may result to you having more money.

Depending on whether you value time or money also dictates what you should do right now. If you know you’d rather have time in the future, you’ll need to start making smart money decisions now. You don’t want to spend every last dime, because you’ll need to work harder to recoup it in the future. Ultimately, messing with your time.

If you know you’d rather have money in the future, you can be a little less conservative right now. Your time to put in the hours will come, so enjoy your time now. As I said before, and will continue to remind you, there’s no wrong answer. There’s no right way to do this. It’s simply about understanding your priorities, so you know how to move forward after you graduate.

5. “Would I Rather Save or Pay Off Debt First?”
The final question to ask yourself to assess your financial priorities during a pandemic (or any time, for that matter), is if you’d rather have a savings before paying off your debt. You may notice a trend with some of these questions – do you prefer having money in your account or not? You need a savings and you need to pay off debt. It doesn’t matter which route you take first. You just want to know which would work best for your financial situation.

If you’d rather build a savings before paying off debt, think about a number that makes you comfortable. Be realistic. The more time you spend trying to build up your savings, the more you’re being charged in interest on your debt. When the time comes, determine a realistic number for your situation and work towards it. Once you reach that number, shift your focus to paying off debt.

If you’d rather pay off debt before building a savings, keep in mind that you’ll want to have a plan for anything unexpected. You don’t want to be in a situation where you put all of your extra money towards debt and then you have nothing to cover your car breaking down. Paying off debt definitely helps you save money in interest, but it can slow you down if you’re not careful. The article Should You Pay Off Debt or Save During a Recession can help as well!

When you’re a student living in uncertain times, like we are right now with this pandemic, take the conservative approach. Make sure you have a cushion in your bank accounts. As things start to look clearer for you, you can re-shift your focus back to your debt pay off.

These are all question to ask to gauge your financial priorities. You don’t need to do anything with the answers right now. We need to get through this pandemic first! However, knowing the answers will help you see things a little clearer when it comes to your money and spending decisions. You’ll be better prepared financially when COVID-19 is behind us. Good things are on the horizon!

P.S. If you’ve graduated or are close to graduating, definitely read the article What to Do If You’ve Graduated During a Recession. 

Raya Reaves is the Founder and Finance Coach of City Girl Savings. Raya launched City Girl Savings in 2015 as a resource for women from all walks of life to learn about personal finance and money management. Raya teaches women how to create and stick to realistic budget plans to reach their financial goals. Raya resides in Austin, Texas with her boyfriend and two Yorkie dogs.