Saving for multiple financial goals
More often than not we have more than one long term financial goals, like establishing an emergency fund, saving for retirement, and saving for your child’s college fund. If you can’t decide which one to save up first or you want to tackle them all at the same time, you can divide your contributions according to this approach.
- Decide how much you will contribute to your funds each month, and stick to this amount. Let’s say, for example, $100 each month.
- If you are still establishing your emergency fund, the biggest chunk of your contribution should be allocated for this, about 40 to 50 percent.
- Divide your remaining contribution to the two goals. If you feel they are equally important, you may want to contribute more to the one that will be used up sooner, like the college fund.
To know more about saving for multiple financial goals, click here.