How to Juggle Long-Term Financial Goals When You’re in the Thick of Parenting

When your children are young, your life is focused on “now.” You might intend to start thinking about preschool applications, but your baby needs a diaper change now. College savings matter to you, but you’re expecting baby #3 and need to find a minivan now. You’ve been meaning to open a UGMA (Uniform Gifts to Minors Act account) for your kids’ future or boost your retirement savings, but summer camp deposits are due now.

Any parent can find themselves in a tough spot between short-term needs that can’t wait and long-term goals they can’t afford to delay forever. Fortunately, you can reach big goals by taking small, consistent steps. These encouraging reminders and action steps may help you think through some options for how you manage your finances.

Any Retirement Savings Are Good

You may worry you’re behind on saving for retirement, but if you’re saving at all, you ought to feel good about yourself

According to data from the most recent “Survey of Consumer Finances” from the Federal Reserve, less than half of households under 40 reported having more than $10,000 saved for retirement. Only 57% of Americans age 30-34 and 48% of Americans age 25-29 had more than $1,000 saved. If you’ve gotten started, that’s a great sign. Your goal might be to keep building your habit of contributing towards retirement until you’re on track for your target amount for your age. If you haven’t started yet, an early goal to consider could be focusing on getting your first $1,000 saved so you can work up some momentum. Of course, don’t get complacent: Play around with a retirement calculator to figure out how much you might need to retire comfortably.

Keep in mind that any investments carry a risk of potential loss as well as the opportunity for gains. A financial advisor can help you build a plan to prepare for retirement.

How much to save for retirement

Your retirement target amount depends on how much you make and the lifestyle you expect to live in retirement.

A general estimate is that you may need about 70-90% of your pre-retirement income each year to keep a similar standard of living in retirement. How much money you need in your account to help make this possible can be challenging to estimate. Some rule-of-thumb estimates say to save 10 times your salary by age 67, while others say you need 25 times your annual expenses to be ready for retirement.

Where your target falls might depend in part on whether you’ll receive Social Security benefits. The Social Security Administration estimates that on average, their retirement benefits replace about 40% of an earner’s income.

What you can do now

Check with your employer to see whether you can expect to receive Social Security benefits in retirement. If you’re self-employed, look into your options to earn credits for Social Security.

Once you have a sense of whether Social Security is likely to be part of your post-retirement finances, use the U.S. Department of Labor worksheet to get a quick calculation of what percentage of your income you should consider saving in order to be on track. Are you far away from that? Small steps can add up, so even increasing your savings by 1% can help edge you a little closer. If your employer offers any savings match, this can also help your money stretch further.

You Probably Don’t Need to Save for 100% of College Costs

If your child goes off to kindergarten next fall, by the time they start college in 2037, in-state public schools may cost over $35,000, and tuition at a four-year private school could top $80,000.

Before you despair, first remember that the majority of first-year, full-time students receive financial aid, roughly 85% of students. If your child takes out loans, that may help lower your contribution further.

An updated rule of thumb for college savings is to aim to save enough to help cover a third of college costs. Depending on various factors, including whether you plan to send your child to a public or private college, this might mean saving somewhere between $170 and $485 per month, starting when your baby is born. If that feels out of reach, remember that some 529 plans don’t have a minimum contribution. Aim to add what you can, whether that means saving an additional $100 per month, $20 per month or just starting a regular savings habit at all.

While 529 plans are a common way to save for college, they aren’t your only option. Some parents open a Uniform Gifts to Minors Act (UGMA) account to contribute money their child can use for any expense, not just college.

What you can do now

You can open a 529 plan with no minimum contribution. If you haven’t started saving for your kids’ education, opening an account can be an important first step. If you are interested in multiple kinds of accounts to contribute money toward your child’s future, learn more about advantages of different custodial accounts for your kids.

Use a calculator or talk to a financial professional to estimate how much you should ideally save for college. If you can, take a step to get at least $50-100 closer to your monthly goal (or whatever you can afford for now).

Healthy Habits Can Make Everyday Finances More Manageable

Your household income only lets you afford so much. It’s not reasonable to say that every family should simply “find a way” to carve extra savings out of their budget. But using your money skillfully can help you make the most of your family’s resources.

One way some families save a little extra is by using their tax refunds to help boost savings. If you have not received an expected refund, you can check the status of your tax refund through the IRS. It may be a good idea to stay informed on how policy changes may affect tax brackets, deductions and credits in 2026, in case this might affect what refund you might expect.

Many households use credit to handle bills, but credit can also be a source of debt and stress. Seeking resources or help from a credit counselor can help you make a plan to get out of debt and put money back toward your family’s goals.

Finally, it’s good to have a plan for what to do in case of a short-term financial emergency. Look over options to get emergency cash if you need it and decide which plans are best for you.

Parenting is all about baby steps. From watching your child’s literal first steps to making incremental progress to reach financial goals, your attention to the little things can go a long way.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

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