If you are anything like me, you have a lot of financial goals to juggle. Beyond the whole get out of debt problem, you have to save for an emergency, a down payment and an education. On top of that there is the biggest challenge of all - preparing for retirement. So how do you approach these goals, do you focus on one or tackle them all?
I have always taken the tackle it all approach, even if it’s not the best financial decision. When I had mountains of credit card debt, I still saved money in my 401k and mutual funds. Currently I’m splitting our savings between the wedding, emergency fund, down payment for a new home and our many early retirement goals. I take this approach mainly for emotional reasons, it makes me happy to know that we are working towards these goals even though they are many years away. It may be decades before we can retire and sail off into the sunset, still I save $100 each month towards that retirement boat. Knowing that I am preparing for the future satisfies me today. Also, many financial goals are easier to achieve when time is on your side. This explains why you have to start saving for retirement in your 20’s, even though it will conflict with more immediate goals like buying a house. But is tackling all your goals at once the best approach?
There are definite drawbacks to trying to accomplish everything. By dividing your resources, it is more difficult to achieve any one goal. It also takes longer to achieve those goals. Tackling everything may not make the most financial sense either, sometimes giving priority to one goal above the others (like paying off debt) will be best for your bottom line.
Lately I’ve been wondering if I should change my approach. It will be very difficult to save up a down payment for a new house while still tackling our other goals. We could eliminate our retirement savings, our monthly investments and such in order to set aside more towards a house. It would get us into that new home faster, but I worry about making up for lost time with the other goals. For now I will split the difference by putting more emphasis on the down payment while scaling back, but not cutting completely, our other investments. How would you approach the situation? Do you prefer to focus on one goal at a time or do you try to do it all at once?
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3 comments:
I definitely prioritize goals and focus on one at a time. But I can't all together abandon the rest, so they stay at some minimum level until they can be top priority. Retirement is the hardest one to balance because it never feels like enough
I've always been a "do it all at once" gal. If I focus on one, it would drive me crazy that I was essentially ignoring all the other goals. The priorities change, but I always think about ALL of them.
I'm with stackingpennies. I concentrate on one goal at a time, but I often have some "back-burner goals" that I contribute some set amount to. I have the opposite problem as you...if I try to do it all, I feel like I'm not getting anything done.
I do like to keep in mind a 'master plan' of what I all want to accomplish and when I'll be able to get to certain things. That helps me balance things and tells me when I really can't ignore something and need to put it on that back burner instead.
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