Whether it’s saving for travel, building a nest egg to start your own venture, or saving enough for a comfortable retirement, chances are, you’ve got a few financial goals weighing on your mind.

I know because most of my clients come to me with competing priorities and they share how it can feel overwhelming.   A typical scenario is the desire to take a nice family vacation while also saving for a major home renovation and planning to leave your corporate job one day to start a business. It’s enough to make anyone feel conflicted.

Sometimes we have to say no to things, but my approach to financial planning is to give you knowledge about how you might be able to get to “yes” on most, if not all of your goals over time.  Here’s the “too long, didn’t read” (TDLR) version of the article, all financial goals are possible given a high enough savings rate and enough time.    

However, since time and money are usually limited, we have to prioritize what we will start with.  So, how do you decide which goals should come first?

How to Prioritize Competing Financial Goals

Get a big picture of your finances

Before you can prioritize your financial goals, you need to lay everything out on the table.   Taking an inventory can help you develop a clear picture of your overall finances.

Consider these important questions:

  • How much and what type of debt do you have?
  • How much do you currently have saved for retirement?
  • Are you taking advantage of any retirement benefits offered by your employer?
  • If you were fired or faced an unexpected emergency, would you be financially prepared to handle it?
  • How much do you save monthly outside of retirement accounts? And what type of account(s) do you use for your savings?
  • Do you anticipate any large upcoming expenses?
  • Where do you want to be financially a year from now? Three years from now?
  • How do you choose where to spend most of your monthly income? Do the largest budget items reflect what you value most in your life? 

Reviewing your finances in this holistic way can help develop a deeper understanding of your financial resources and it may uncover blind spots. Use this big picture to guide your understanding of the gap between where your finances currently are and where you aspire for them to be.

Assess what matters

Perhaps you have goals like saving for a cruise next spring or replacing your car with a newer model. There’s nothing wrong with these pursuits, but after developing a better understanding of your finances, it’s important that you distinguish between what is and isn’t essential.

Some goals can be delayed without major consequence; others warrant more attention and thus take precedence. You can’t compromise on the following:

  • Saving for retirement – Many people delay saving for retirement because they assume that time is on their side, believing that they can always save more when they’re older or simply retire later. Don’t be mistaken, though—due to illness or an unexpected layoff, you might not have a choice in when you retire. And the earlier you start setting aside funds for retirement, the more you have to gain, thanks to compounding interest. Matching contributions from your employer also help with funding this goal, so long as you take advantage of this benefit.
  • Establishing an emergency fund – Should a medical/dental need arise, car accident, pet emergency, job loss or any other unanticipated event occur, you’ll want to be prepared to handle the financial consequences. That’s why setting up an emergency fund is of utmost importance; this fund acts as a financial buoy for what life throws at you. Without one, you’re vulnerable to all kinds of unexpected financial setbacks, including being more likely to take on high interest rate debt. These funds must be in cash. 
  • Paying off high-interest debt – There’s no good reason to hold onto high-interest debt. Because of the steep interest rate, you’ll pay significantly more in interest than your principal. So get rid of your debt asap—it’ll mean being able to save and invest in more meaningful goals.

If you haven’t already crossed these goals off your checklist, then it’s time to refocus your finances to do so. 

If you have, then spend some time thinking about the value each of your other financial goals and priorities bring to your wellbeing and level of happiness.  

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Calculate the monthly cost of your goals

With your goals laid out and ranked according to the way you value them and how they impact your life, you can determine tangible next steps for reaching them. An easy way to do this is by calculating their regular monthly cost.  Understanding the true cost of something is another way to determine what should come first. 

Simply divide the cost of your goal by the amount of time between now and your expected goal deadline.

Example 1: You typically get invited to a few out of town weddings and family events per year, but you love to travel and you’d also like to take one big trip per year to Europe.  On an annual basis, let’s say it costs about $5,000 per year to take all the trips you want. Instead of “paying as you go” save up in advance throughout the year in a separate travel fund to help you visualize when you can plan your next trip.  If you look at the budget on a monthly basis instead of an annual basis, you’ll know that you need to auto-transfer $416 per month into a separate “travel savings account.” That way this money is earmarked and set aside for your travel expenses.  

Example 2: You received an inheritance of $50,000 from a family member and want to use it towards a 20% down payment on a $500,000 home.  Your total down payment will be $100,000 and you have $1,000 per month you can save in your budget. It’s going to take you about 4 years to come up with the rest of the money for the down payment.  If you value getting a house more than eating out, perhaps you decide to eat at home more often, save $500 extra per month, and then you can buy a house a year sooner. 

Tailor your budget to your goals

The issue with carrying several financial goals at once is the paralysis that comes with deciding what to focus on and how much you can put toward it. 

However, after calculating how much it costs to reach your goals, you’ll be in a better position to decide how to allocate your hard-earned income. 

To tailor your budget based on your goals, treat your debt payments and savings contributions as fixed costs, just as you would with your rent and utilities. Consider automating these transfers so that it happens in the background without further thought.

Does your budget look tight? Expect to adjust spending categories where there’s leeway based on what you value most. For example, your monthly entertainment and dining out expenses. Or, to find more room, consider substituting some discretionary expenses with more affordable ones, like a generic gym membership in place of a boutique fitness studio.

Of course, even with budgetary compromises, you may find you can’t attain all of your goals by their original deadlines. That’s fine—simply adjust your goal deadlines for a more reasonable time frame. 


Make no mistake: prioritizing your financial goals doesn’t come easily. 

But with sound financial planning, you can create a well-rounded budget that effectively tackles your money-related ambitions—some of them simultaneously, in fact. 

Of course, it won’t always be possible to address all of your financial goals at once. Remember to separate your need-based goals from the desire-based ones, and prioritize retirement, emergency savings, and high-interest-rate debt first.

What financial goals do you struggle with achieving? Share your thoughts.

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