Life as a family is often a flurry of hectic fun. One minute you’re trying to help the kids with their homework or figure out sports schedules and the next you’re thinking about longer-term goals like college educations or future weddings.

So how can a family balance paying for everyday expenses with saving money for future goals? It comes to down to learning how to assess your cash flow, maximize your savings, and plan for both now and the future. Here are tips on how to save money for your family financial goals.


Take a closer look at the money coming in and going out every month, and you just might find a few obvious places where you can save. While every family is different, your costs generally break down into one of three categories: fixed expenses, goal funding and discretionary spending.

Your fixed expenses — those non-negotiable essentials that keep your family’s life running, like mortgage payments and phone bills — should comprise about 60 percent of your budget. Funding your family’s various savings goals and your retirement goals should make up about 20 percent. And discretionary spending, or what’s left over to spend as you wish on “extras” like dinners out, should be no more than 20 percent of your budget.

If you find you aren’t diverting enough money into the goals category, there are several easy ways to cut costs. If discretionary spending is more than one-fifth of your monthly budget, look at what your family truly enjoys and uses. That is, don’t get rid of Netflix or your gym membership if they’re going to good use — but perhaps there are a few snack-box subscriptions or cable add-ons that your family won’t really miss.

If you need to free up even more cash, look at your essentials category next — maybe you can lower some of your regular expenses by, for instance, shopping around for better cell phone or car insurance rates, or finding ways to lower your energy costs. If you’re still paying off debt, try calling your credit card provider and asking them to lower your annual percentage rate.


Often the easiest ways to save is to automate your savings so it doesn’t stay in your main checking account for too long and risk getting spent before you can set it aside.

You may already be automating a certain amount toward an emergency fund, but what about a family vacation fund or that trip to Europe next summer? Or a wedding fund to help a child pay for their big day? Diverting money into a high-yield savings or investment account each month — no matter how small the amount — can help you grow your savings faster than you think thanks to compound interest.

Also, don’t forget to boost your savings accordingly as you or your spouse make more money. You might also consider earmarking a portion of any windfalls, such as an annual bonus or an inheritance, toward your family’s various savings goals.


Just like the way you’re likely using a qualified account such as a 401(k) or IRA to save for retirement, put some consideration into the type of account you choose for a particular goal. For instance, if saving for your kids’ education is a goal, consider putting money into a 529 plan, which is designed specifically for that goal. You get tax advantages for using it for college costs, but you also pay penalties if you don’t use the money for that — which can help ensure you’re not tempted to dip into the account for other purposes. Look at an account’s pros and cons before deciding on one for a particular goal.

Likewise, consider the timeline by which you want to save for a goal. Generally, if you’re saving for a goal that’s within five years, like a big family trip or a down payment on a bigger home, you probably want to keep that money in a lower-risk savings vehicle, like a high-yield savings account. If the goal is more than five years away, you may want to consider putting it in an investment account so that it has time to grow but can also potentially make up for any losses that may result from market volatility. If you need help with the details, consulting with a financial advisor can help you prioritize goals, balance saving and spending, and determine the right savings vehicles to use.

Recommended Reading