I don’t know about you, but I often find myself overwhelmed by how many things I want to save up for.
This past year alone, I was saving up for two conferences, multiple trips, and a vacation.
But that’s not all – in the background, I was also saving up for a move and a new pet, as well as car repairs.
I also have a general “miscellaneous” fund for things that pop up but aren’t really emergencies, which came in handy when two monitors died in the span of two months, and I needed to buy a new one.
Even though I’m an avid saver, it can be a pain to keep track of all my savings goals and be patient enough to achieve them, so I know how challenging it can be, especially if you’re also dealing with debt.
Let’s figure out how to prioritize, set, and achieve your savings goals so you can start enjoying your money.
Create a List of What You Want to Save for
I’ll be the first to admit, I love creating lists and getting my thoughts organized.
A lot of people think it’s silly or a waste of time – that they can keep track of everything in their head – but I find that doubtful.
I can name plenty of my savings goals off the top of my head, but there are always a few I forget about, and I definitely can’t remember the exact amount of money I need to reach the goal, much less how much money I’m transferring toward that goal each month.
Writing your goals down is more effective. If you don’t believe me, just Google it – there are quite a few articles and studies that prove it.
So open up a document on your computer or grab a pen and some paper, and get to writing. If you have a significant other, try to include them on this process (make separate lists), even if they’re not as into personal finance as you are. Both of you being on the same page with this will increase your chances of success.
At this point, just write down whatever savings goals come to mind, no matter how crazy they may seem. You want to get as much down as possible, and worrying about whether your goals are realistic or not will only distract you. That comes next.
Prioritize and Organize Your List
Okay, if you feel overwhelmed right now, don’t panic. No one is asking you to achieve all of these goals within the next year or two, and some of these goals may not make the second round of edits.
Before you go through your list, you might want to take a break from it. Leave it alone for a day and then review it with a fresh perspective.
In your first review, knock off any goals that really do seem out there. Maybe it was just a fun thought that passed through your mind, but upon reflection, isn’t something you actually want to dedicate time and money toward. (Like how I had this grand idea for a mansion years ago, and am perfectly happy in a 500 sq. ft. living space now…)
By the way, if you included your significant other/spouse/partner in this exercise, make sure you communicate! Go through each of your lists together and see if there’s anything that stands out. Perhaps they listed a goal that’s important to them that you weren’t aware of, or maybe you have a lot of the same goals.
Either way, now isn’t the time for judgment. Do your best to work together on joint goals, and listen to each other when explaining why certain individual goals are important.
Match Your Goals Against Your Values
You didn’t think I’d leave values out of the equation, did you?
In the second review of your list, I want you to think really hard about whether or not the things on there align with your values.
As a quick example, you wouldn’t find, “Save for a down payment on a house” on my list of goals, because I don’t want to be a homeowner. However, it can be very easy to fall prey to what society thinks you should do, or what all your friends are doing. Just make sure you’re staying true to what you (and your partner) want here.
Of course, your values may change over the years, as will your goals. As frustrating as that idea may be (especially if you love planning), it doesn’t make a difference. You can always use your funds toward another goal in the future if that does happen. We want to eliminate any barriers you might encounter on the way toward achieving your savings goals!
Develop Timelines for Your Goals
Once you feel confident you’ve cut your list down to the essential goals that really matter to you (these are things you should be super excited to save for!), it’s time to develop timelines for each of them.
What I mean by that is making three categories: long-term, medium-term, and short-term savings goals. Not all of these goals will take you months or years to achieve, so it’s important to give them some order.
Plus, if you’re still feeling overwhelmed that you have too many goals, sorting them this way may allow you to see you can save for quite a few of these simultaneously.
Long-term savings goals should be the ones that you’re okay with taking around 5 years or more. Reaching a retirement milestone might be on this list (or early retirement, if you’re feeling ambitious).
Medium-term savings goals are those that will take around 2-4 years to save for. On this list may be a wedding, a down payment for a house, a down payment for a car, or a travel fund that will last you around a year.
Short-term savings goals, as you might have guessed, are those that will take around a year or less to achieve. So things like a small vacation ($1,000ish), a computer, a new wardrobe, or a moving fund might be on this list.
Place your goals in each of these categories, and see where you end up. Having a few long- or medium-term goals is okay. You have a lot of time to achieve them!
Where you might get a little overwhelmed is if you have too many short-term savings goals, and not enough income to save for all of them. That’s where this next step comes in.
Figure Out How Much to Save
In my opinion, this is the fun part, because from here, you can mostly “set it and forget it,” making achieving your savings goals simple.
What you’re going to do for each goal is to figure out how much you need to save, and then how much per month you need to save to achieve it in the timeline you’ve specified. You can estimate if you’re not 100% sure how much you need to save and then adjust it later.
So for example, let’s say this is what your goal list looks like:
Long-Term Savings Goals:
- House down payment – $20,000 (5 years) – $333.33 per month
Medium-Term Savings Goals:
- Wedding – $10,000 (3 years) – $277.77 per month
- Car – $3,000 (2 years) – $125 per month
Short-Term Savings Goals:
- Vacation – $1,000 (11 months) – $90.90 per month
- Computer – $800 (5 months) – $160.00 per month
That’s a total of $987 that you need to save each month, in addition to your regular savings (like an emergency fund, a tax fund if you’re self-employed, etc.).
That might seem like a lot, but consider this: similar to the debt snowball method, you can “roll” your savings into one another once one goal is achieved.
In other words, after 5 months, you can start contributing $250.90 toward your vacation ($160 + $90.90). Once that’s saved for, you can then contribute $375.90 toward saving for your car.
If you don’t have enough cash left at the end of the month to save for all of this, that’s okay. You might need to re-evaluate your goals, or put some of the long-term goals on hold for now, until you can either earn more or finish saving for your short-term goals.
The worst thing you can do at this point is to feel defeated, or you might never start saving for your goals. We’ll touch on that in a second, but let’s make sure you’re set up to save!
Automate Your Savings
The easiest way to save for multiple goals is to open several savings accounts. I used to have one savings account that held all of my savings, but I had a very difficult time withdrawing money from it because it wasn’t earmarked for any specific purpose. Even if you don’t have that psychological barrier, it’s just easier to keep track of everything when it’s separate.
I personally love my Capital One 360 account because opening sub-savings accounts there is incredibly easy. You can then set up automatic transfers from your checking to each savings account so it runs smoothly in the background. You’re not required to think about saving at all, and the money is in there before you can spend it.
Capital One 360 also helps you do all the above with calculating and setting your savings goals (under the tab “My Savings Goals”). You can figure out what to save weekly or biweekly if you want to time your transfers with your paycheck. Other banks might offer this, so check your bank’s site to see what tools they offer.
Juggling Your Goals
Back to what to do if you don’t have enough money to put toward all your goals right now.
Start small. I know, that’s not the answer you wanted to hear, but if you’re just getting started in your career, or if you’re still paying off a lot of debt, then you might not have enough money left to put toward all your goals.
It’s important not to jeopardize your financial situation in this case. Don’t leave yourself in the negative or without enough to make a payment on your debt, as the consequences you’ll face aren’t worth it.
Instead, I would highly recommend taking the mindset of side hustling for each of your goals. Going back to our earlier example, if you need $800 for a computer, then try making $800 from side hustling in a month or two. This might mean writing 8 articles at $100 each, taking on a web design project for $1,000, or working a part-time job for a month or two.
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Now you’re ready to set and achieve your savings goals with ease! Whatever you do, don’t give up or become overwhelmed by all your savings goals. If they’re truly that important to you, you’ll do what it takes to achieve them, or you’ll re-prioritize.
How have you set and achieved your savings goals in the past? What are some of your current savings goals you’re working toward, and how are you planning to achieve them?
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I also have Capital One 360. I love automating savings, bills, etc. Just frees up my time for things I would rather do. The bigger challenge is figuring out how much to save and anticipating future needs and wants to make saving money easier. =)
It is definitely hard to choose between goals sometimes, but I think it gets easier the longer you’ve been saving!
Good advice. I’m a big one for making lists. But I think the prioritizing of those lists is really what makes them beneficial. It can really help to keep from feeling overwhelmed and focus on what’s really important.
Yes, I love lists, but prioritizing is critical to stop yourself from feeling overwhelmed. At least, that’s how it goes for my to-do lists. =)
I’m a list junkie too – there’s something so satisfying about crossing things when I’ve completed them! Right now our main savings goal is long-term – we’re moving to Australia in 7 years and that’s going to cost quite a bit!
Oh, that’s an awesome goal! I always hear amazing things about Australia. Good luck!
I love lists too but, strangely, I don’t have a list of savings goals. I think they’re in my head, but writing down some concrete numbers would be helpful. Automating savings is the way to go, then you don’t even have to think about it each month (or be tempted to spend that money). And I love the idea of a snowball method for savings!
I don’t always have a concrete list, either, but I’ve found having multiple savings accounts works almost as well since it’s there every time I log in. Although, most of the things I’m currently saving for are short-term, so it’s a bit easier to focus on them!
Great post! I agree it can be hard to juggle different goals and choose how much to allocate to each. These tips definitely help–even just making a list is a great place to start. I especially like how you describe matching them with your values.
Thanks! I’m all about connecting everything back to values. I find that too many people are focusing on things outside of values, and then they end up with buyers remorse, or frustrated that they can’t achieve what they really want because of all the other distractions.
Capital One 360 is a life saver for saving for multiple goals! Good recommendation.
Thanks – I’m so happy I switched over to them. Online banking is so much easier with them than it is with a regular brick and mortar bank.
I’ve been hearing so much about the 360 accounts, I might have to give it a try.
Automating savings is great for people like myself who tend to be forgetful. Great article with actionable tips.
Absolutely agree, in the past year I saved a good emergency fund, unluckily I had several unexpected bill so I need to refill it but with budget, rules, sort of shopping ban I’m sure I’ll be able to achieve all my goals!!!
Matching your goals against your values is key!! This helps us take a good hard look at every expenditure, and if it doesn’t match up, we don’t buy it.
I like what you have to say about prioritizing. Writing out the list (and I’m not a natural list-maker) gives you the advantage of becoming more aware of the fact that you can’t have everything – and so knocking things off the list is a logical follow-up step. I got into debt because I didn’t prioritize. If I wanted it, I bought it. Not anymore though!