How to Find Balance With Your Savings Goals

by Ryan Guina

One of the most effective ways to save money is by creating savings goals. This gives you a defined reason why you are saving for something, instead of just throwing money into a pot and pulling it out whenever you “want something.” If you want to take it a step further, you can create a sinking fund, or a unique subaccount for your savings goal. This is easy to do at many online banks, including Capital One 360 and Ally Bank.

Sub accounts make it easier to balance multiple savings goals, but they also make it easier to spread your money out too far if you aren’t careful. When you are trying to save for multiple things all from the same paycheck, you can end up allocating so much cash to your goals, you have little life over for day to day living. While it is good to have savings plans in effect, it is also very crucial that you find a balance for each of your goals. Otherwise you may end up financially strapped in one area and find you have to take from one account to make up for another deficiency, essentially destroying your entire plan.

how to balance multiple savings goals

Do you have multiple savings goals?

So how can you keep things in balance? It’s not difficult but does require some forethought and continuous effort. Here are some tips for finding a balance in savings goals:

Make a List

In order to know how you have to save, you have to know how you want to save. Start by making a list of what you want to save for and define your goals (why you want/need to save). Categories like retirement, emergency fund, vacations, household bills, and big ticket purchases can be a start to your list, depending on what your goals and needs are.

Prioritize Your List

Once you have established a list, you may find that you do not have enough income to sustain all of these goals. You need to prioritize the categories in order of importance for you and your financial needs. You need to establish the priority of each item so you can split your allocations accordingly. Included in the prioritization should be the definition of which of your savings goals are short term and which are long term and which goals are most likely achievable and realistic.

Check Out Your Budget

You need to gather your income statements and your bills if you have not already established a budget. Figure out just how much money you have left to put towards your goals each month on a consistent basis.

Do Your Division

For each of your goals, you need to establish the amount you strive to achieve. You also need to establish the amount of time you need to accomplish your goal. For instance, if your goal is to max out your IRA each year, you would start with your $5,000 annual contribution limit, then divide by 12, which gives you $416.66 per month (max limit for a single investor under age 50 – see this link for all IRA contribution limits).

A good short term example would be a large purchase (say a new refrigerator) that costs $1000. You’d like to purchase the refrigerator within the next six months. Dividing the $1000 by 6 months, you would need to set aside roughly $170 a month or about $43 a week to achieve your goal.

It may be more difficult to establish the longer term goals such as those for retirement but as time goes on and your income increases, you can gain more perspective about how much you need to save to achieve goals for the future. Short term goals may be easier to figure out. You can start with an emergency fund if you can’t afford multiple kinds of savings plans. Try to save up 6-12 months of living expenses to get going.

Make Your Changes

Your savings plan needs constant care and upgrading much like your budget. If you consistently work towards fine-tuning your goals and distributions of monies, you will likely achieve success financially with all of your goals. Goals will also change in priority depending on daily life and financial needs so keep up with your plan and keep it active.

Photo credit: vintageamanda

Published or updated May 21, 2013.
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{ 2 comments… read them below or add one }

1 Crystal @ Prairie Ecothrifter

I love ING subaccounts. We have 8 of them. Granted, we are sort of combining most of them and using them all up for the downpayment on a new home right now, but after that, we’ll be building towards our separate goals again.


2 Ryan Guina

they are very convenient. I used one for my daughter’s first savings account, until I opened her own. 🙂


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