CNNMoney has a series of articles entitled Money 101 — a step-by-step guide to gaining control of your financial life. There are some good lessons here, including controlling debt, hiring financial help, and buying a home.
Each lesson contains several pages of information, links to other resources, a glossary, and a self-test. Many of the lessons also include a financial calculator related to the subject. My favorite lesson is actually the first one, setting priorities, in part because its “calculator” is so unique. The Prioritizer helps you rank a series of goals. Here’s how it works:
Enter as many as 15 different goals to which you or your family aspire. Goals can be short-term, such as “Taking a great vacation this summer,” or long-term like “Securing a comfortable retirement.” The calculator will then ask you a series of questions that force you to choose between each possible pair of goals. Based on your answers, it will then compute a preference score for each goal and an overall rank order for the list.
The “series of questions” the calculator asks really a series of comparisons: “Do you prefer choice A or choice B? Choice C or choice D? Choice A or choice D?” Once you’ve evaluated every pairing, The Prioritizer produces a ranked list based on your answers.
Here I’ve used The Prioritizer to rank some popular personal finance books.
This has obvious applications for personal finance. It can be difficult to untangle the knot of financial goals that make up your life. Which is more important, paying off debt or saving for retirement? Paying down the mortgage quickly or having more money to invest? Saving money with a used car, or obtaining peace of mind with a new car? Putting money into college funds for your kids, or taking a family vacation? You may not be able to untangle the threads on your own, but The Prioritizer can help.
If you take some time to approach this seriously, it can be a great way to clarify your goals. (Trent recently discovered The Prioritizer, too, and has a great suggestion for using it to reinforce smart financial decisions.)
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