You need to have “x” amount of savings in your savings account. You need to have “x” amount of investments in your portfolio or 401K. You need to have “x” amount of dollars in your emergency funds.

You’re told you need “xyz” to have healthy finances. But where do you start if you live on a tight budget, have a modest income or a ton of debt? To fulfill just one of these goals, it might seem as if you need a miracle.

Fortunately, there is a way to prioritize and know which types of accounts need more contributions, and when you should make them.

The Answer Varies From Situation To Situation

Of course, if you put money into all three accounts at once – that is, your savings accounts, investments and emergency fund – then that would be ideal. But very few of us live with ideal financial situations. So you need to know how much, how often and when you should put your hard-earned dollars into these accounts.

Use Ratios To Prioritize

You really can put money into all three accounts if you choose. The way to do this is to take a deep look at your income, debts, expenses – essentially the big picture of your finances. This may be sobering and maybe even a little unpleasant, but it’s the first step at regaining control of your money.

With these numbers written down, you’ll have a picture of what can remain or needs to change. Using these numbers, you can start to apply certain “ratios” that are now accepted as standard amounts to put into certain accounts.

For your 401K, for example, you can follow the general rule of saving 10%-20% of your salary for a 401K. This may seem like a big chunk of money, but it doesn’t have to be a monthly “fee”. You can spread out the payments throughout the course of a year, making them when you’re most able.

For your savings, the rule of thumb is to contribute at least 20% of your earnings to your savings. There seems to be some wiggle room here, because some experts will go as low as 10-15%, perhaps, to accommodate those with very modest incomes or substantial debt.

For an emergency fund, there isn’t much of a percentage given since they’re more flexible and not meant to be an asset. With that said, most experts recommend having at least three to six months of income saved. This amount can cover basic expenses during times of unemployment or unforeseen events (ie. natural disaster, sudden illness).

Keep in mind, too, that these ratios can change depending on the amount of money you already have saved and your age. For example, with a 401K, a 30 year-old with over $100,000 saved could put less than the suggested 10-20% amount. But a 50 year-old with no savings would need to put more than 20% of their salary if they wanted to have an appreciable amount of money for retirement.

What Matters Most?

This is a difficult question to answer because your savings, 401K and emergency fund are ALL important, especially “in the moment”. What do we mean by “in the moment”? Well, if you faced a sudden job loss or were unable to work due to an injury, your most valuable source of funds for that circumstance would be your emergency fund. Or if you are approaching retirement, you’ll then appreciate how impactful those numbers are (unlike when past decades).

So there is no account that’s more important than the other. They all just happen to have more use during a particular circumstance, hence why you get the advice to contribute to all of them at once.

But what should you do if you can’t make contributions to all at the same time?

Put Horses Before Carts

In a previous post, we discussed meeting the challenge of saving and paying off debts simultaneously. We’ll give the same line of advice here. Yes, mentally, it might seem overwhelming to try and do all at once, but the trick to doing so is by prioritizing certain payments.

You can do this by adjusting your ratios, putting slightly more money into certain accounts while putting less into others. So in the case of debt, you’d want to tackle outstanding balances with higher amounts and interest rates first because these will compound and remain longer than they should.

So for example, you’d want to pay more than the minimum on a $30,000 loan with a 10% interest rate while dialing back on your savings or 401K a bit.

In the meantime, you would contribute minimal payments to your savings accounts and investments. Now keep in mind that although this isn’t ideal, it is a temporary solution. As time goes by, your debt will decrease, meaning that you can slowly contribute more to your savings and investments.

The Financial Puzzle Is Incomplete Without All Pieces

Ultimately, your savings accounts, investments and emergency funds all matter. It’s easy to think you don’t need one especially when life seems stable or if retirement is far away. But ask anyone who has dealt with a sudden emergency, or sits in shock at how fast they’ve reached retirement – they’ll tell you that they were caught off guard.

To avoid those disorienting and anxiety-inducing feelings, do your utmost to contribute to all three funds, even if it’s limited. Over time, a little contribution goes a long way, and you will slowly (but surely) set yourself up for some sort of cushion for challenging times and a more comfortable future.