Surviving the Financial Cycle: 5 Ways to Find Calm in the Midst of Competing Financial Priorities

The “financial spiral” refers to the set of competing financial priorities and life events that make it difficult for many individuals to save for long-term goals such as retirement.

The struggle for salvation is real

According to the 2024 Goldman Sachs Retirement Survey, 67% of Americans report that monthly expenses, financial difficulties, and unexpected events such as medical emergencies or family support obligations are the main reasons they struggle to save. This “vortex” pulls individuals in different directions, making it difficult to stay on track toward retirement and other major financial goals.

Five steps to calm your financial spiral

You may feel overwhelmed, but you can escape the financial spiral and build long-term financial stability.

Here’s how:

1. Follow the rules of saving play

Not knowing where to focus is a common feeling among those who live in a financial vortex. It can be stressful when you’re pulled in countless directions without any clear idea of ​​what to do.

Many financial experts recommend saving rules as a way to prioritize how you use your money.

This approach helps ensure that your money is used in the most impactful way.

• Start with an adequate emergency fund to cover the unexpected. Emergency saving is the foundation of financial security. Ideally, you have at least three months of expenses available to help you cover unexpected events like a job loss, home repairs, or a large medical bill.
• Then you’ll need to save enough in your employer’s retirement savings plan to get the employer match. This is free money.
• The third priority is to pay off any high-interest debt you carry.
• Fourth, contribute the maximum to a health savings account, if that is available to you.
• If you still have money available, you must contribute the maximum to an IRA. (Use Bouldin’s chart to evaluate whether you would be better off saving in a traditional or Roth account.)
• Next, you’ll want to contribute the maximum to your employer’s plan.
• The seventh step in the savings rules is to contribute to another after-tax account such as a 529 if appropriate.
• Finally, pay off low-interest debt, such as your mortgage.

2. Have a written financial plan

Having a written financial plan is crucial to overcoming financial challenges. A plan gives you a clear roadmap and helps you focus on long-term goals. The 2024 Goldman Sachs Retirement Survey found that individuals with a written financial plan are more likely to be confident about their financial future and achieve their goals.

A good plan includes budgeting, setting goals, and addressing potential risks, such as emergency expenses or market downturns. It gives you direction and allows you to weather the financial storm without getting off track.

Get started now with Bouldin’s chart.

3. Start small with small money habits

Big financial goals may seem intimidating, but starting small is the key to success.

Adopting small money habits — like saving $10 a week, reviewing your budget monthly, or paying a little extra toward debt — can make a big difference over time. These small actions, when practiced consistently, help build positive financial momentum without overwhelming you. Duke University’s behavioral finance research highlights how small, incremental financial behaviors lead to lasting financial change.

4. Set goals and Prioritize your future

It’s easy to focus on short-term expenses, but prioritizing your future ensures long-term success. According to the Retirement Fidelity Study, individuals who prioritize their future by consistently saving for retirement are more likely to retire comfortably and on time.

Setting clear financial goals is one of the most effective ways to prioritize your future. Goals give you direction, help you stay focused, and allow you to track your progress. Start by setting short-term and long-term goals, such as building an emergency fund, paying off debt, or saving for retirement. Break these larger goals into smaller, manageable steps.

5. Look for opportunities to save significant amounts

If you want to know how to save more money but don’t really know how to put it to work, explore these 23 savings hacks. You’ll likely find a strategy that won’t stress you out too much. And if you start habits like these, very soon, they can make a huge difference in your retirement.

Use Boldin’s planner to step out of your financial vortex

The financial spiral may seem daunting, but following disciplined savings rules, creating a written financial plan, adopting small money habits, and focusing on long-term goals can help you break free. Start small, stay consistent, and always keep your future in mind. By doing so, you will be able to navigate the downward spiral more easily and build a secure financial foundation for the years to come.

Not sure? Try any of these “what if” strategies in Bouldin’s chart and see the impact they have on your future.