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Financial management

Where should my next dollar go?

With so many competing financial goals, it can be hard to decide where to put your next dollar. This short video can help you prioritize.
2:41 minute watch
July 23, 2021
Financial management
Financial wellness
Prioritizing goals
Investor goals


Sometimes life can feel like a list of competing financial priorities. Saving for retirement. Debt. The house. College. That other debt. When you’ve got a lot going on, it can be hard to decide where to put your next dollar. We’ve got 4 tips that can help you balance debt management with saving for the future.

First, focus on knocking out the debts that carry the highest interest rates—even if you have other, smaller debts that look like they’d be easier to pay off and be done with. The longer you hold on to high interest debt, the more expensive it becomes. Whenever possible, try to pay more than the bare minimum on your debt each month. Getting it out of the way sooner rather than later will reduce what you owe over time and free up more of your money for things that are more fun—like drinks that come in coconuts.

Second, take full advantage of potential high-return opportunities like your employer’s 401(k) match. This means making sure you’re contributing enough to your retirement plan to get the full match. Research shows that as many as 1 in 4 people aren’t getting their full employer match, and that adds up to $24 billion that go unsaved every year.* That’s a lot of coconuts.

Third, check emergency savings off your list. It’s always a good idea to plan for at least three months’ worth of living expenses, including rent or mortgage, other bills, and food. It can be hard to think about putting away emergency money on top of trying to pay down debts—but you’ll be protecting yourself from taking on even more debt if something unexpected happens. Think of it as an investment in confidence and peace of mind.

Fourth, remember that tax-advantaged accounts are your friends. They’re great places to divert cash when you’re saving for specific goals. There may not be much flexibility in how you can spend the money in these accounts, but what you could potentially gain in after-tax returns can make them worth it. HSAs offer tax-advantaged health care savings. IRAs do the same for retirement savings, and 529s are for education. To get the most from these tax benefits, choose your account types based on how soon you’ll need the money in them. If you’re saving for a shorter-term goal, it’s worth funding taxable accounts so you won’t run into limitations or penalties when you make withdrawals.

If you’re looking for more strategies to help you tackle debt and maximize your savings over time, financial advice can help. When you’re ready to take the next step, we’ll be here. So will the coconuts.

Sometimes managing your household finances can feel like a juggling act. Between managing debts, saving for the future, and keeping track of what’s coming and going for regular bills, it can be hard to prioritize which line items should come first in your budget. This short video can help you hone in on what’s most important when it comes to saving and managing debt. If you’re looking for more ways to build financial wellness, we’re always here to help.

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*Financial Engines research, May 2015. Missing Out: How Much Employer 401(k) Matching Contributions Do Employees Leave on the Table? Available at

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Vanguard does not provide tax advice and we recommend that you consult a tax or financial advisor about your individual situation.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.