10 Big Personal Goals You Should Put Your Money Toward

Although everyone’s financial life is different, most people have certain big financial goals they wish to reach in the course of their lives. Whether your primary goal is educating your children, buying a house or making sure you don’t outlive your income, the sooner you can prepare for these financial objectives, the better.

Saving money can be hard, but if you have specifically defined goals, it can be easier to chart a path toward meeting your objectives. You might consider sitting down with a financial advisor to determine which goals you should prioritize, or if there are any that are missing that might apply to you personally.

With all that in mind, here’s a list of common financial goals that you should consider putting your money toward.

Education is a critical part of getting ahead in America, both for yourself and for your children. A good education opens up better jobs, alumni networks and other perks that help make getting ahead financially a little bit easier. Even if you’ve already got your college degree, you should invest in yourself by saving for training and educational programs throughout your professional career.

If you want to keep the edge, make yourself stand out in your own company or appeal to job interviewers, having additional skills and capabilities beyond what the competition has can help ensure you always have a good job. For example, if you are a financial advisor, consider investing in advanced training and certifications, such as the Certified Financial Planner or Chartered Financial Analyst designations.

An emergency fund might not seem like a savings goal, but it should be the foundation of your entire financial plan. An emergency fund should be thought of like insurance — you hope to never use it, but if you suffer a big loss, you’ll be glad you have it in place. The size of an emergency fund is the subject of endless debate, but if you can save up somewhere between three and 12 months of income, you’ll likely be in good shape.

Your emergency fund is critical because you won’t be forced to take money from other savings or investment accounts, or worse yet, go into debt. Think of it as a backstop to ensure that no matter what mishaps pop up in your life, your long-term financial plan remains intact.

Retirement savings are critically important unless you want to work until the day you die. The good news is that for most people, retirement is still a long way away. In most cases, you’ll have decades to prepare for your expenses in retirement, and thanks to the power of compound interest, diligent savers can amass quite a nest egg by the time they finally hang up their work boots.

If you’re fortunate enough to have a good 401(k) plan at your workplace, you’ll benefit not just from pretax contributions and tax-deferred earnings, but also employer contributions to your account. If you start contributing young enough, just a few hundred dollars per month could be enough to make you a millionaire by the time you retire!

Couples spent an average of $28,000 on the combined costs of a wedding and reception in 2021 — $34,000 if you include the rings, according to an annual study by The Knot . If you don’t want to begin your married life with sizable debt, it pays to set aside money for a wedding long before you are even considering it.

It’s very easy to get caught up in the moment when planning a wedding and reception, and costs can rapidly spiral out of control. Taking this into account, you should plan on both saving more money for your wedding than you think you’ll need and instituting a strict budget when it comes to the actual affair. Remember, that $28,000 figure doesn’t even factor in any type of honeymoon. The sooner you can start saving for what amounts to one of the biggest expenditures you’re likely to face in your life, the better.

Owning a car or truck is simply a way of life in America. The average American household has 1.88 vehicles, with more than 90% of households having access to at least one vehicle. The bottom line is that you’re likely to pay for or finance multiple vehicles over the course of your life. Since this is essentially a known expense, you should plan ahead to make sure you’re saving some money for vehicle ownership.

While some analysts suggest that you should only pay cash for a vehicle, in many cases you can get 0% or low-cost financing on a vehicle, and it may make more sense to divert that cash elsewhere. However, most agree that you should put a sizable down payment for any vehicle you’re buying, if for no other reason than you don’t want to be “underwater,” where the size of your loan exceeds the current market value of your vehicle, at any time. Regardless of how much you put down on your vehicle, you should plan ahead and save up the money you need before you buy.

Debt is a burden when it comes to financial planning. Although some debt is considered “good” — such as low-rate home mortgages — most consumer debt is simply a financial weight. In addition to having to pay back principal, you’ll have to divert some of your cash flow to paying off interest, which can reach the high double-digits for credit card debt. At those rates, your debt can double in just a few years.

If you find yourself in debt when you sit down to make your financial plan, attacking and paying it off should be at the very top of your priority list. Once you free yourself from the shackles of debt, you’ll also free up cash flow in your monthly budget for savings and investments.

While weddings, college educations and cars can all be expensive, your house is likely to be the biggest expense you’ll ever face. And unlike some of those other expenses, even if you wanted to — which you shouldn’t — you can’t finance a house with a credit card loan, and you can’t even get in the door unless you put a large chunk of change up first in the form of a down payment.

Yes, some loans allow you to put down 3.5%, or possibly even less, but the standard down payment still remains at 20%. With a 20% down payment, you won’t face the additional expense of private mortgage insurance, or PMI, and you’ll have some immediate equity in your home. Plus, you’ll pay less in fees and interest over the course of your loan. Seeing as a house purchase is such an important and cash-intensive proposition, you should begin saving for it before you even think you might be in the market.

If you have kids, or plan on having them, one of your first priorities should be to set up an educational savings account of some type. No matter which type of account you use, the more you can save early on, the less of a sting you’ll feel when it comes time to pay tuition and the numerous other bills associated with a college education.

There are many options when it comes to saving for college costs, so consult with your financial advisor to choose the right option. Some accounts, like 529 plans, can provide tax benefits, while others, like simple brokerage accounts, carry fewer restrictions and more flexibility.

Saving and investing don’t have to be all about denial or long-range plans. In fact, saving for a vacation is not only wise, but it’s fun and it offers more of a near-term payback.

Let’s say you take off the traditional two weeks per year for vacation, and you generally spend about $10,000. With a savings plan, you’ll only have to set aside about $200 per week to hit your $10,000 vacation savings goal every year. Having money to pay for your vacation in full before you even travel is smart because the last thing you want to do on your holiday is stress about money. If, instead, you put your vacation on your credit card every year, it can be anything but relaxing. Plan ahead and save the small amount required to ensure you and your family can really enjoy your vacation.

Long-term care is one of the most overlooked protections when most people consider insurance and their savings plans. Yet, according to the U.S. Department of Health and Human Services, more than half of elderly Americans will need long-term care at some point. Long-term care is a bit controversial because it can be expensive, the need is uncertain and other insurance programs, such as Medicare, may cover a portion of the expenses.

However, the younger you are when you buy LTC, the cheaper it is. And if you have no coverage in your old age, you could easily deplete all of your savings rapidly. That would transform your retirement from a time to enjoy to a time where you’re just getting by due to your large medical bills. Although some of the other financial goals on this list may take precedence, consult with your financial advisor to see if saving for long-term care should be a priority in your financial plan.