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Managing your household finances is a balancing act. On one side you’ve got the financial needs of meeting your daily living expenses. On the other side, you have all sorts of “wants”— things to buy, places to go, a secure retirement to plan for.


To tick off all these boxes, you need a savings strategy.

Calculate your total savings allowance

A great place to start is by creating a spending and savings plan. This can help you get a handle on your income and expenses. Hopefully, you’ll have a larger dollar figure in the income column than the expense column. This surplus is the amount you can potentially allocate to various savings goals. Call it your total savings allowance.


If you’re just breaking even, or worse, in the red — meaning more money going out than coming in — you may need to cut back on expenses.


At the same time you’re trimming expenses, you may also consider exploring ways to add more income. From a part-time job to selling household items you no longer use, more income without additional expenses will give your spending and savings plan a bit more flexibility.

Prioritize your financial goals

Divide and prioritize your savings goals into short-term, medium-term and long-term categories.

  • Short-term goals

    These goals could be funding an emergency savings account, buying a new appliance, or paying off debt.

  • Medium-term goals

    A larger home, new car, family vacation or a college fund for the kids are examples of medium-term goals.

  • Long-term goals

    Your big long-term goal is a comfortable retirement.

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.

Prioritize your financial goals

Once you’ve prioritized your financial goals, next you can determine how much of your savings allowance you can allocate to each goal on your list. The amount of money you need to accumulate, your timeline and the relative importance of the goal will dictate the amount you allocate to each. Make sure you don’t stretch your savings allowance too thin. If you can’t make a meaningful contribution to every goal, you might have to reprioritize the goals or put one or more of them on the sidelines for now. Some people find that three to four savings goals — emergency fund, retirement, plus one or two others — make a good starting point. You can always add more goals as your income allows. Remember, it’s a balancing act that may require regular adjustments.

Make sure your goals are both specific and realistic. If your goal is to have $1,000 in an emergency savings account, commit to setting aside a certain amount each week. For example, save $20 weekly until you reach your goal.

  • If you participate in a retirement plan, contributions are automatically deducted from your pay. Since your savings and spending plan should be created using your net pay, retirement plan contributions do not need to come out of your savings allowance as contributions were already made.

    Use our Retirement Income calculator to check your progress. Try some “what-if?” scenarios to see the potential impacts of saving more or changing your target retirement date.

Set your savings on autopilot

Many people find that automating their savings contributions helps them keep their goals on track. Contributions to a workplace retirement plan are always made through automatic paycheck deductions. For other goals, consider opening separate bank accounts for easy tracking and to avoid dipping into these funds for non-goal-related expenses. You can also transfer money to your goal account when you make financial trade-offs. For example, if you choose to make dinner at home instead of going out, consider transferring the $20 you would have spent out from your daily checking to your goal account.


Monitor your progress

Life happens and priorities change over time. Periodically reevaluate the importance of your non-retirement goals. Are they still relevant? Is the time frame still realistic? If so, great! Keep up the good work! If you’re falling behind, make some adjustments. Extend the time frame. Save a little more here and a little less there. Downsize the goal.

To successfully manage your finances, there’s no substitute for careful planning and disciplined actions. Create a realistic plan and stick to it to give yourself the best chance of balancing all your goals.

OneAmerica Financial is the marketing name for the companies of OneAmerica Financial. 


Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice. These concepts were derived under current laws and regulations. Changes in the law or regulations may affect the information provided. For answers to specific questions, please consult a qualified attorney, tax advisor, or financial professional.