Prioritizing your savings goals

I recently got this question on my YouTube channel and I thought it was so good I would share it with all of you! 

Budgeting is so overwhelming. Simple in theory -- in vs. out -- but so, so, so overwhelming. We just had our fourth baby and now there are so many things I want for our family: college, trips, home improvements, activities for the kids.
How do I go about setting these goals? How do you know how much to set aside? I've started vaguely tracking my spending for this month just to see where my money is going. I guess that's as good a start as any.

Tracking what you're spending is a good start. Not a great start. However, that is a great question. It's good to track where your money is going; it's better though to tell your money where to go before it goes anywhere and that is a budget.

If you are not budgeting on a regular basis, I know it can be hard. I know it can be overwhelming. But I feel like sitting down and making a budget brings just a level of peace to the situation.

Personally, we use EveryDollar to track our spending and stay on budget. We got off track budgeting for a while and personally, I can tell you the sanity that it's brought to our home to get back into budgeting. It's been refreshing to get back on the same page, and for Jason and I to hold each other accountable.

Really, I would start with making a budget. It's great to track where your money is going, but instead, tell it where to go before it flies away.

Short-term vs. long-term goals

When there are so many things that you want for your family, I came up with a long-term/short-term plan.

My short-term plan is a year. I know that in the next year, I want to do some home improvements, buy a new car, and take a little trip. Those are my short-term savings goals.

Then I have my 5-year goals and I have my 10-year goals. Because, honestly, we need to have priorities when it comes to our savings -- just like we need to have priorities when it comes to spending.

One of the things that we prioritized when it came to savings was college education for our boys. The first thing we did when we got out of debt was to start college savings accounts for our children. Before we even started saving for a down payment on a house.

We felt so strongly about this because one of the burdens we had was Jason's student loans. That really was the bulk of our debt. So we wanted to give our kids that advantage, if you will, of not having student loans.

However, we know that we're not going to be able to pay a hundred percent for our kids to go to school. But that means that, long-term, our family will have to have a plan to pay for college to avoid debt.

Prioritize your needs vs. wants

So sit down and make a list of all the things that you want for your family and for yourself. And then look at what is the most immediate need.

It may be that you have some home improvements that need to be taken care of first for the health and happiness of your home. Or maybe, your family has just gone through a really rough few years and you need to reconnect. Going on a family trip might be perfect for that.

But you need to look at everything you want and then give it a prioritized number: What is the thing that your family needs the most?

Of course, all of these things are to take place after debt is paid off. No, it doesn't mean you can't have fun, you can't do fun things for your family, you can't go and do things together. But for me, that first priority is getting out of debt. 

What about you? What tips do you have for prioritizing your savings goals?