How to juggle your competing priorities
Can you save for a house while you're also saving for retirement? Should you build up that emergency fund if you also have credit card debt? Can you take that dream vacation while you still have student loans to pay off?
Prioritizing your goals can be overwhelming and challenging. Luckily, Chase Credit Journey® has some strategies that can help.
Choose your strategies
Depending on your financial goals, you might choose to focus on either one at a time or several at once, contributing a little toward each. Here are some strategies to consider as you try to find the best approach for you:
- Figure out where you stand financially: Understanding and tracking your finances can help you identify opportunities to reduce your spending so that you can set aside more money toward your goals.
- Identify the goals that motivate you: Choose the goals that'll keep you motivated. For some people, paying off one entire credit card or loan is what's most important. For others, it's the possibility of retiring on a sunny coast.
- Build your emergency fund: Think of your emergency fund as your safety net. You can use it to pay for any unexpected medical bills or to cover you if you lose your job. Experts recommend having about 3 to 6 months of expenses saved in your emergency fund.
- Pay off your debt: Make extra monthly payments toward your credit cards and loans. Start by paying off small debts in full or target debts with the highest interest rates.
- Get your 401K employer match: If your employer offers a retirement match, make at least the minimum contribution to your plan each month so that you get the full match.
- Run the numbers on paying down debt versus investing: If you can potentially earn a higher return on your investments than the interest you're paying on your debt, it may make more sense to invest any extra money you have left at the end of the month.
Keep in mind that there's no right approach, so choose the strategies that best work for you.
Revisit your goals
It's important to revisit your goals regularly. Review your plan every month or two to see if you're making progress toward your goals. You can always make adjustments if you're not.
Also, consider whether your life situation has changed. Do you have a new job? Are you thinking about buying a house? Are you moving to a new city? Plans often shift, so make sure to update your goals as often as you can.
- Figuring out what to do with your extra money can feel overwhelming when you have multiple goals that you'd like to fund.
- You don't necessarily need to choose just one financial goal. You can either work on one at a time or a few at the same time.
- Make a plan to reach your financial goals and review it regularly to see how much progress you're making. Update your plan when your life changes.