You Can Save for More Than One Goal at a Time. Here’s how.

young couple sitting on sofa calculating finances

Saving for retirement might be less challenging if it’s your only goal. But when you have many goals competing for your dollars, it’s easy to become overwhelmed. For instance, how do you balance funding your retirement account with eliminating high-interest debt or paying for your child’s tuition?

It’s possible to juggle more than one financial objective at a time, and it doesn’t have to be an either-or scenario. Focus on these five strategies to help you make the most progress.

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Prioritizing ‘Needs’ vs. ‘Wants’

If you have many savings goals, start by compiling a list. Put goals that fall under “needs” toward the top and goals categorized as “wants” near the bottom. For example, you need cash in the bank to cover unexpected expenses, such as a medical emergency or home repair. A vacation, however, is a want.

You can gradually reach some goals, such as building a retirement nest egg, over many years of steady saving. Others, such as replenishing an emergency fund, may be achievable in less time, allowing you to then redirect money toward a goal farther down on your list – like that vacation.

Next, get a clearer sense of spending and opportunities to save by tracking your expenses each month. While part of your income covers essentials, such as groceries, utilities, or the mortgage, you’ll likely uncover discretionary expenses you can reduce or eliminate. This can free up money for savings.

The bottom line? By identifying resources and assigning a purpose to your savings, you can then determine the best ways to help grow your money.


You can gradually reach some goals, such as building a retirement nest egg, over many years of steady saving.


Saving for a Retirement That’s Years Away

One of the easiest ways to save for retirement is through a tax-friendly 401(k) or similar workplace plan. With these plans, your contributions are automatically deducted from your paycheck. Bonus: Employers often match workers’ contributions, with an average 401(k) match at 4.7% of pay.1

Younger employees in 2020 can save up to $19,500 annually in a 401(k), while workers ages 50 and older can contribute an extra $6,500 for a total of $26,000 for the year.2 If that’s too much of a stretch, contribute enough to get the employer match and increase your contributions annually until you reach the contribution limit.

If your employer doesn’t offer a workplace retirement plan, then save and invest through a tax-advantaged traditional or Roth IRA, available through investment firms. The annual contribution limit is $6,000 for younger workers, and $7,000 for those ages 50 and older.2 With an IRA, your contributions can be automatically transferred from your bank account to the IRA.

And remember, the earlier you start, the less you need to save each month to build your nest egg.

Creating an Emergency Fund

A recent survey by Bankrate found that nearly four out of 10 Americans would have to borrow money to pay an unexpected bill.3 This lack of savings – and the high cost of borrowing money – is why many financial experts say that creating an emergency fund should be a top priority.

It’s generally advised that you set aside three to six months’ worth of living expenses in emergency savings – although you might need more. You can gradually build an emergency fund over time. For example, putting $75 from a weekly paycheck into a savings account you’ll save a total $7,800 in two years – and that doesn’t include any interest you may earn. Or, reach your goal faster by depositing tax refunds, pay raises or a bonus into emergency savings.

Keep this money in an easily accessible, interest-bearing savings account. Find financial institutions offering the highest rates on deposits – often online banks – at Bankrate.com and DepositAccounts.com.


Reach your goal faster by depositing tax refunds, pay raises or a bonus into emergency savings.


Paying Off Debt

If you have low-interest rate debt, say, a mortgage or federal education loan with lenient payment options, you don’t have to rush to repay it early. But consider paying off high-interest credit card debt as one of your top goals. The typical credit card interest rate is 16%, which is higher than the average annual return of the stock market.4

Save on interest by paying down the balance on the credit card with the highest-interest rate first. Once that card is paid off, put extra money toward the card balance with the next highest interest rate. Continue this until all of your card debt is eliminated.

Then, the money that once went to repaying credit cards can go toward some of the “wants” on your priority list, such as a dream vacation or kitchen remodel.

Paying College Bills

Maybe you’ve saved some money for a child’s college education, but it may not be enough to cover tuition for four full years – or beyond.

In that case, many parents can be tempted to borrow from a 401(k) or other retirement plan. Avoid this for two reasons: First, you will be pulling money out of the market and missing years of potential growth. Second, if you’re unable to repay the money, you’ll owe taxes and possibly an early withdrawal penalty, leaving you with less money for retirement.

To help make college bills manageable, consider following the “one-third” rule recommended by Savingforcollege.com.5 Under this strategy, parents save one-third of expected college costs – preferably in a tax friendly 529 college savings plan – while their child is growing up. Once the child is in college, another third of the cost will be paid out of the parent’s current income and student grants or scholarships. And the last third will come from student or parent loans.

After graduation, parents can help repay student loans out-of-pocket without tapping their retirement accounts.


1 Fidelity Q1 2019 Retirement Analysis: Account Balances Rebound From Dip in Q4, While Savings Rates Hit Record Levels, Fidelity, May 9, 2019.

2 Types of Retirement Plans, Internal Revenue Service, June 18, 2020.

3 Survey: Nearly 4 in 10 Americans Would Borrow Money to Cover a $1K Emergency, Bankrate, Jan. 22, 2020.

4 Current Credit Card Interest Rates, Bankrate, July 8, 2020.

5 Get Aggressive About College Savings, Savingforcollege.com, April 10, 2019.

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