Personal Finance

Setting financial priorities

Setting financial priorities

“Things which matter most must never be at the mercy of things which matter least.” – Johann Wolfgang Van Goethe

Life is a question of balance but finding and maintaining that balance can be a challenge. The thing with life is that it’s unpredictable and what keeps you in perfect alignment one day may tip you off balance the next. Just like a performer walking the high wire though if you can maintain a strong core and a steady step, keeping your balance (and recovering quickly from the ‘wobbles’) becomes much easier. Maybe it all starts with establishing your financial priorities.

Rocks, sand, and coffee

There is a story about a university professor who presents his class with a glass jar, some large rocks, some small rocks, some sand and a mug of coffee and asks them to place all the items into the jar. The students try for a while with no success and then ask the professor for the solution. The professor takes the big rocks and puts them into the jar. Then he pours in the small rocks, shaking the jar a little so that they fall between the larger ones. Lastly, he takes the sand and tips it into the jar, letting it settle in between the big and small rocks until the jar is full. He explains to the class that his approach to filling the jar is an analogy for achieving balance in life. The big rocks are the really important aspects of life; your health, your family and friends. The smaller rocks are the other things in your life that matter such as your job or your hobbies and the sand is all the other “small stuff” and your material possessions. If you put the sand in the jar first then there is no room for the rocks or the pebbles. The same can be applied to your lives; if you spend all your time and energy managing the ‘small stuff” you’ll never have time to devote to what’s truly important. The students absorb the message and then one raises her hand asking, “Professor, what about the coffee?” The professor smiles take the mug of coffee and pours it slowly into the jar where it soaks into the sand. He looks at the class and says, “this is to prove that there is always time for a coffee with friends.”

I’ve used the lessons in this story for a while as a guideline for keeping the balance in my day to day life but this week I thought about how they might relate to financial balance:

The big rocks

The big rocks are your commitments to saving and eliminating debt. Experts agree that “paying yourself first” is a critical component of financial success and being able to build wealth without carrying debt puts you in a strong position to achieve your financial goals. Simple strategies such as pre-authorized payments make it easier to ensure that those commitments are made with the minimum of conscious effort giving you more time to focus on everything else in your “jar”.

The small rocks

The small rocks are the “necessities” or fixed expenses that have to be paid each month. Bills relating to food, housing, and transportation as well as insurance all fall into the category of “needs” because they relate to the items that provide us with food and shelter, allow us to work and protect us from the unexpected curveballs that life can throw.


The sand is the “wants”; the little indulgences and non-necessities that make life more enjoyable. We work hard for our money and it’s only fair that we should have the opportunity to have fun with it. It’s a lot easier to enjoy these things guilt-free when you know that you’re paying for them with dollars that have been purposed for splurging and don’t have to be used for anything else.

Often, when things start to go off track financially it’s because we’re focusing on the sand rather than the rocks. Whether it’s an unexpected event or expense, sometimes just one thing can kick-start a domino effect that sends us into a whirlwind and takes our focus off the “big rocks” that keep us grounded. Keeping things in balance is often just a question of revisiting our priorities. Sometimes, life gets busy or things change and when the dust settles we forget to take a step back and make sure that our focus is where it needs to be.

There can be a lot of power both in having a plan and in working it; knowing that you’re on track to achieving your goals anchors you and gives you a sense of calm that allows you to weather the day to day shifts that threaten your balance. Making sure that plan allows time for coffee with a friend is also a good thing – anyone who’s ever over-indulged in a little retail therapy will attest that your emotional health can have an impact on your financial health! This week, why not take some time to figure out your financial priorities by differentiating between your big rocks, small rocks, and sand and to make sure that you’re focusing on them in the right order. If you have tips for defining and keeping your financial priorities in line, I’d love to hear them.


  1. David Schmidt

    I think getting out of consumer debt should be everyone’s first priority. People need to get used to living within their means.

  2. S. Williams

    Very good article. The use of the rocks and sand really helped to emphasis the importance of each financial priority. Thanks.

  3. Dave

    First priority should be …. Not loading up with consumer debt in the first place.

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