When you’re raising a family, it seems there’s always an expense to be paid. But while you’re spending today, don’t forget about saving for tomorrow.

You likely have multiple savings goals. But the good news is you don’t need to achieve all of them at once. You can prioritize your goals and set benchmarks to check your progress along the way.

Here are four strategies to help you make the most of your savings.

1. Budget for the basics.

As a first step, ensure your family’s basic needs are being met. Housing, food, utilities and car payments fall into this category. But another “pay this first” is any recurring debt payments.

Some debt, such as a mortgage, is unavoidable — and can help you increase your potential net worth down the line. Missing these payments could damage your credit, creating additional financial burdens and in the worst case scenario, you could lose your house, car or wages depending on the type of debt.

2. Save for an emergency.

Once you’ve budgeted for the basics, you can begin building a cash reserve for emergencies and unexpected events. Aim to save three to six months’ worth of living expenses in an account you can easily access, increasing to up to 12 months as you approach retirement. This can help you avoid taking on new debt or dipping into your retirement savings to cover unexpected expenses. Keep in mind, smaller amounts can be beneficial too, so the important thing is to get started.

3. Save for retirement.

Speaking of retirement savings, this should be your next savings priority. While retirement may seem like a distant need compared to everything else you’re paying for, time is on your side.

If your employer offers a 401(k), try to contribute enough to qualify for any matching funds so you’re not leaving money on the table. Also, consider contributing the maximum to an individual retirement account (IRA).

How much money do you need in retirement? This depends on how you plan to spend your retirement. Talk with your financial advisor about your vision for retirement. Together, you can develop a strategy to work toward your goal.

But what if you’re also saving for a child’s education? We don’t recommend putting money away for college at the expense of saving for retirement. Remember, loans and grants are available for college but not for retirement.

Retirement and education don’t have to be either/or goals, but you may need to make some trade-offs to achieve both. Talk to your financial advisor about:

  • The amount you plan to provide for a child’s education
  • The age at which you want to retire
  • What you plan to do in retirement
  • How much you’re saving

Together, you can crunch some numbers and evaluate your options.

4. Stay on top of your debt.

When you begin prioritizing debt repayment, focus on high-interest rate, non-tax-deductible debt first. This debt is very costly to maintain, so eliminating it first can accelerate your debt reduction. How do you know if you’re carrying too much debt? One way to calculate this is through your debt-to-income (DTI) ratio:

Example: How to calculate a DTI radio
Monthly required debt payments (excl. mortgage)$800
Monthly net income÷$5,000
DTI ratio16%

As a rule of thumb, strive for a DTI ratio of 20% or less. If you include your monthly mortgage payment in your debt calculation, your DTI ratio ideally should be 35% or less.

Your DTI ratio can be a great predictor of your financial health: the higher the number, the higher the percentage of income you’re using to pay off debt.

How Edward Jones can help

The bottom line: You can help get the most from your dollars by prioritizing your savings goals and then sticking with them over time. Your financial advisor can help you develop a strategy that lets you save for tomorrow without shortchanging today.