While being able to save for your financial goals so you can pay cash to realize them, keep in mind that you can finance major purchases and get loans to send the kids to college. But because you can’t finance your retirement as you can a new vehicle or house, you’ll need to make retirement savings a priority. Focus on funding it, and then see what’s left for your other savings goals. If your employer offers a retirement plan with matching contributions, try to save at least enough to get the full employer match. It’s like getting paid to save!
Building an emergency fund should be one of your next priorities. Having funds to cover three to six months’ worth of daily expenses readily available can help prevent an unexpected expense from sabotaging your other savings goals. And it can prevent you from taking on additional debt.
If you have a lot of debt — particularly high-interest credit card debt — commit to paying down those accounts as soon as you can. Once debts are paid off, the amount you were allocating to this financial goal can be used to fund your other goals.