Mint has you covered during coronavirus. Stay up-to-date with the latest financial guidelines and resources here.

MintLife Blog > Saving > What Gets Paid First? The Best Way to Prioritize Your Savings Plan

What Gets Paid First? The Best Way to Prioritize Your Savings Plan

Saving Who Gets Paid First? How to Prioritize Your Savings Plan

Does your list of savings goals feel a little overwhelming?

You need to save for retirement, obviously. And you’d like to pay for your child’s education– but those are decades away.

In the more immediate future, you need to save for eventual car and home repairs. After all, your tires will lose their traction, your dishwasher will break, and your roof will need to be repaired. It’s not a matter of “if,” it’s a matter of “when.”

You’re also aware that you should put some money aside for medical bills. You’re healthy now, but someday you might have to shell out for an expensive deductible, co-pay or prescription. You’d also like to build a general emergency fund to protect you in case of a job loss.

On top of that, you’d like to pay down your mortgage a little bit faster or perhaps you’d like to save for a down payment on a home. You’d prefer to buy your next car in cash, but you need savings for that goal, as well.

It’s an exhausting list.

So how should you go about prioritizing when you have so many disparate savings goals? Here are a few tips.

Retirement Comes First

I’m going to say this in stark terms: nothing is more important than your retirement.

Think about it: you’re trying to save enough money to live for 30 or more years without earning a dime. That’s an ambitious goal.

To complicate matters, you don’t just need to make your money outlive you, you also need to protect it against inflation while simultaneously sheltering it from too much risk– like the ups and downs of the stock market.

Furthermore, your other savings goals come with alternatives and options. Your children can take out student loans. You can buy a car with financing. You can skip your annual holiday vacation.

But you can’t take out a “retirement loan.” There’s no entity that will give you a cost-of-living payout during your golden years. Social Security might give you a little, but it probably won’t be enough. You’re on the hook for the balance.

Depending on your age and circumstances, you’ll want to put aside 10-30% of your monthly income into retirement savings. And when deciding how to put your savings to optimal use, there are online resources that can help., an online investment advisor, can help you optimize your retirement portfolio by giving you specific, step-by-step advice for making the best investment decisions.

Save for Emergencies

Your second-highest priority should be to set aside some money for emergencies: Your car’s engine is sputtering, your roof is leaking, there’s mold growing on your walls or you unexpectedly lose your job.

You’ll be in a much better position – and have more peace of mind – if you have some money set aside for these emergencies.

How much should you set aside? Experts advise saving between 3 to 9 months of your income. This can help you get through major calamities like a job loss.

There’s a caveat here, however: If you currently have high-interest debt, it doesn’t make sense to shovel all your extra income into a savings account.  Which leads to my third point …

Pay Off Debts

Your third priority should be to pay off debt.

There are two theories about the best way to approach this: the “debt stacking” method advises that you should pay down your highest-interest debt first, while the “debt snowball” method says you should tackle your smallest debt, regardless of its interest rate.

No matter which method you prefer, the most important thing is that you’re paying off that balance.

Once you’ve put aside money for retirement, built an emergency fund and paid off your debts, you can begin allocating your savings towards more fun goals, like a vacation — you’ve earned it!

Kevin Cimring is Joint CEO of, an online investment advisor that helps people lock in more money for retirement. Jemstep’s easy-to-use website takes the complexity, difficulty, and anxiety out of investing.

Providing the high-caliber, personalized advice that has traditionally been available only to wealthy investors, Jemstep empowers all investors to take charge of their retirement planning and invest with confidence. A Registered Investment Advisor with the SEC, Jemstep is led by a team of experts with over 100 years’ combined experience in financial management and technology innovation and development. Learn more at




Leave a Reply