What's Most Important? How to Prioritize Your Savings Goals

Posted on 02/24/2014

There are cars to replace, college educations to fund and retirements to plan for. How in the heck can you prepare for it all? Consider these tips for prioritizing your savings goals and it might not feel so daunting.

Create an Emergency Fund
Your first savings goal should be to pile up cash in the event of an emergency. There's no point in saving for other financial goals if a dental emergency is going to force you to borrow money or you'll have to pay for car repairs on a credit card. Many money pros suggest saving up enough cash to cover 3-6 months of expenses.

Invest for Retirement
The earlier you can start saving for retirement the better. It may seem like a long time from now, but the sooner you start saving the more time your investments will have time to grow. Delaying your retirement savings by just five or ten years can significantly impact how much money you'll have in your nest egg at retirement. Take full advantage of any company match.

Save for College
The cost of college increases annually and the thought of paying for your child's education might seem overwhelming. But planning for it can be done in baby steps. Set up a 529 Plan that helps you save money tax free. Then ask family and friends to contribute for birthdays or holidays instead of buying your child toys that will break or clothes that they'll grow out of.

Pay Off Debts
If you've got a lot of debt parked in your garage or sitting on credit cards saving for retirement and college is much more difficult. Make a list of your debts, find out how much money you're wasting on interest payments and start to pay them off one at a time. Some experts suggest starting with the smallest debt, others say knock out the one with the highest interest rate. Pick a plan that works best for you and stick to it.

Save for Fun
Sometimes saving for things like retirement or your kids college can seem like such a drag. It's important to take time to enjoy life so make sure you create some room in your savings for fun things like a family vacation. Get everyone on board and make it visual with this free printable from parentingfuneveryday.com.

By Alison Storm

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