Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.
It can be easy to feel like you need to achieve all your financial goals at the same time — maxing out your retirement contributions, paying off thousands of dollars in debt, saving for a house, saving for your kids’ college tuition, purchasing a car and more. That list can be overwhelming to even start thinking about.
In some cases, it might even be necessary to work on more than one goal at the same time. For example, most financial experts nowadays recommend paying down debt and investing money simultaneously.
This can feel daunting and sometimes even impossible. But taking a few small steps can help you get clear on which goals to work toward and how to begin managing them all effectively.
Select previously spoke with Mint CFP Brittney Castro who explained the importance of making sure that the financial goals you set aren’t too extreme. According to Castro, when your goals are too extreme and you’re going in with an “all or nothing” mindset, you essentially set yourself up to fail because you don’t account for all the “gray” areas of life that may pop up.
For example, if your goal is to save $500 a month, but you haven’t even started saving $50 a month, it will be very hard to take the necessary steps to make sure you have room to make it to $500 each month.
Plus, when you’re too extreme with your goals, it makes balancing everything feel so much harder than it needs to be.
Setting more attainable goals starts with taking a look at your spending plan or budget so you know how much room you actually have to progress toward each goal. You can use an app like Mint, which allows you to connect your bank accounts, credit cards, investment accounts and other financial accounts so the app can automatically categorize your transactions. This gives you a low-lift way to figure out where your money is going each month.
Prioritizing your goals can help you feel confident that you’re taking the necessary steps at this time. Imagine putting a ton of energy behind one goal all year only to realize that it would’ve been more prudent to put some of that effort into something else. That might make you feel discouraged and can even rattle your confidence when it comes to managing your money.
First and foremost, you should prioritize building your emergency fund if you haven’t already. Your emergency fund can cushion your fall when it comes to covering unexpected expenses without going too much further into debt. So it’s important to have three to six months’ worth of necessary expenses saved up (or some other amount you feel comfortable with).
High-yield savings accounts, like the Ally Online Savings Account or the Marcus by Goldman Sachs Online Savings Account, can make progress toward that three-to-six-month goal feel a little easier. These accounts typically pay you more in interest each month compared to traditional savings accounts. In other words, your account balance grows even if you don’t make additional contributions. Granted, you won’t earn hundreds of dollars in interest each month, but a couple of extra dollars is still better than just a few cents each year.
Then, you might think about some of your other savings or investing goals. One factor you might use to prioritize how you save for these goals is thinking about your time horizon for achieving them. Like, if you plan to start the home buying process later this year, then saving for a down payment will probably be more of a priority than saving for a goal that’s going to come up in a few years.
And for goals that aren’t top-of-mind yet but you still need to prepare for, you might consider using a robo-advisor like Betterment or Wealthfront to help you automatically invest money for those far-off goals. They do the hard work of picking investments based on factors like your goals, time horizon and risk tolerance, and they’ll rebalance your portfolio over time so you barely have to put much thought into it.
Don’t forget to work in some of your wants. While your financial needs like building an emergency fund and investing are very important, you should also consider things it would be nice to work toward in order to create balance in your financial life. Maybe you love traveling and want to take one week-long vacation each year. To do this, you might create space to save some money each month toward your trip.
Sure, you can manually transfer money from your checking account to your savings account each month, or manually log into your credit card company’s platform each month to pay your bill. But there are some huge advantages to putting those processes on autopilot.
When you have to decide how much money to manually move into your emergency fund or to invest every month, chances are the amount you contribute will depend on how you’ve recently spent on your everyday expenses. In some instances, you may choose to forego transferring money to your emergency fund so you can spend it on an expense that popped up.
We can overcome this by taking away the ability to choose between saving and spending altogether. This is where automating your savings comes in.
Automation ensures that our savings accounts will grow (and our bills and debts will get paid) even when we don’t take the time to make it happen.
Plus, when we spend less time and energy thinking about how much money to put into our savings or to pay toward debt, we can put more time toward other important financial goals, like increasing your income.
There are a few ways you can automate your savings. If you use direct deposit for your paycheck, you can update it so you split your paycheck between a checking account and a savings account. This way, a portion of your paycheck goes straight into your savings account and whatever is in your checking account is fair game for your normal expenses.
Wealthfront, for example, has a feature that lets you do this to make progress toward a variety of goals pretty much on autopilot. If you have a Wealthfront Cash account, you can create different saving buckets (or saving categories) and have your paycheck automatically split between each of them. For instance, you could have a bucket devoted toward an emergency fund, a home down payment, your yearly vacation and lastly for a new car.
Another simple way is to set up automatic deposits from your checking account into your savings account. Set the deposits to occur on the same day each month (like the day after your paycheck hits the account). This way, you’ll be saving a fixed amount of money regularly without even giving yourself the chance to use it for something else.
If you feel overwhelmed by the idea of having to tackle more than one goal at the same time, a financial planner can offer some guidance, strategies and a perspective you haven’t yet considered. Maybe you think you’ll need to focus on four specific needs at once. However, a financial planner might look at your situation and determine it makes the most sense for you to only focus on two goals at this time. Or, maybe your current method is creating more work and more stress and your financial planner creates a strategy that simplifies it for you.
Financial planners can assist with a variety of financial concerns, including income management and debt, guidance on student loans, mortgages and auto loans, retirement planning strategies, investment recommendations and more.
You can try searching for a financial planner using Zoe Financial, which can match you with a list of professionals who specialize in your concerns.
Another option is to use PlannerSearch.org to find a professional in your state. It’ll give you a list of CFP’s near you, and you can also filter by specialties such as employee benefits, getting married, getting divorced, bankruptcy, home buying and more.
Taking on multiple financial goals may sometimes be necessary, but it can also be very stressful. But by thinking about the way you’re creating and prioritizing goals, and automating whatever process you can, you’ll set yourself up to feel more in control and on track toward hitting those goals.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.