Save for retirement, emergencies and short-term goals with these tips : Life Kit Whether you want to save for a vacation or retirement, build generational wealth for your kids or figure out how to split expenses with a partner, Life Kit answers your personal finance questions.

How to save for different financial goals

How to save for different financial goals

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Illustration in a 3D-style showing a purple wallet in front of a light pink background. There are dollar bills coming out of the wallet, a credit card propped up behind it and a stack of coins in front of it.
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Figuring out how to best handle our personal finances already takes a steep learning curve in the best of times. It can feel overwhelming to do so when we're experiencing inflation, rising interest rates and predictions of a recession.

Whether you're navigating savings accounts or sharing expenses with a partner, financial counselors and owners of Trinity Financial Coaching Weslia Echols and Willa Williams are here to help.

Set it and forget it – automate your payments into your savings accounts

Saving just to save is a good start, but if you look ahead to specific goals or needs, you'll be able to direct your savings strategy more effectively.

Williams and Echols recommend opening at least three savings accounts: one for short-term goals, one for emergencies and a third for retirement.

Saving for the short-term will help you take that vacation you've been craving or replace your grandma's saggy couch you got from her in college. Keeping a rainy-day fund will give you peace of mind, in case you lose your income or have a medical emergency. And no matter your age, you're never too young to start saving for retirement.

Once you've opened those accounts, Echols says the first step is to automate payments into those accounts. "Start putting a designated amount into each account" every paycheck, Echols says. "[Your savings] can grow quickly...because it's happening automatically and is already included in your budget."

Save with a purpose

Is the goal of your savings to have some money for easy access? Keep it in a traditional savings or checking account, where it won't grow much but is easy to use. If you're looking for growth over the long-term – like 10 or 20 years – investing in the stock market is something to consider.

If your goal is to set your kids up with a financial safety net they can access when they're older, an investment account will grow the money you put into it faster than a traditional savings account. Whether for regular savings or investing, you can set up a custodial account, which is in both the parent's and child's names, but is administered by the parent until the child is no longer a minor.

Williams says the added bonus of opening a custodial investment account for your kids is that it allows you to show them how compounding interest – or, interest earned on interest – works to grow funds. Essentially, interest "compounds" by earning interest on both the money you are contributing and the interest that money earns.

There are custodial investment accounts to set your kids up for college, like a 529 plan, which allows your money to grow tax-deferred. Then when the money is used for college, the withdrawals are tax-free. Or you can get your kids thinking about retirement early with a custodial Roth IRA.

Communicate openly and honestly about how you want to share expenses with your partner

"There's no hard, fast rule about how to share expenses," says Echols. "It's the communication that you have and knowing your partner that's going to help you honestly answer that question."

Echols says it doesn't really matter who earns more. Instead, she says consider each others' "financial habits, administrative habits and paying attention to detail, things like that."

Honesty is crucial, too, says Echols. She recommends that each partner be aware of the accounts the other has. Financial transparency will foster healthy trust in the relationship.

Some financial autonomy is also healthy for a relationship, says Williams. "My husband and I have a set dollar amount where I can make a purchase and I don't have to call him; he can make a purchase, [and] he doesn't have to call me," Williams says. "When we do that, we see ourselves as adults."

The audio portion of this episode was produced by Sylvie Douglis. We'd love to hear from you. Leave us a voicemail at 202-216-9823, or email us at

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