Everyone has their own financial goals. Only you can decide what you’re saving for, but every dollar you save brings you closer to your goals.
If your goals conflict
After setting your goals, you may find that some of them conflict. For example, paying for a child’s braces may take money from their university savings. Taking care of aging parents could reduce saving for your own retirement.
If you have to choose between 2 or more goals, ask yourself which goal causes the least harm if you don’t reach it. Sometimes you have to set one goal aside for a while to reach a more important goal.
Prioritizing conflicting goals
After setting your goals, you may find that you have goals that conflict. For example, many parents find themselves choosing between saving for their own retirement and saving for their children’s education. If you’re in this situation, ask yourself: How much harm would it cause if you didn't have enough to live on when you retire? If you couldn't help pay for your children's education?
There’s no easy answer. Only you can decide which solution is likely to cause the least harm. For example, you might decide that you need to save more for retirement, and that you’ll help your kids arrange student loans when the time comes. Or, you might decide that saving for their education is your priority, and you’ll retire later than you originally planned. You may also choose to save for both your retirement and your children’s education by putting away a little less for each goal.
Choose your top three goals
Once you’ve defined your financial goals, you may find that you have many things to save for. When you first start saving, choose your top 3 financial goals. Knowing what’s most important to you will help you build the kind of life you want.
Review your top goals: Your priorities will change over time, so review your top 3 goals at least once a year and adjust them if you need to.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca