Did tackling money goals one at a time cost financial literacy expert Barbara O’Neill at least $1 million?

That’s how much O’Neill, a professor at Rutgers University, said she figures she lost by starting to save for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.

“I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could’ve had $2 million,” O’Neill said. 

Too often, financial experts say, people want to attack their money goals one at a time: “As soon as I pay off my credit card debt, then I’ll start saving for a home,” or, “As soon as I pay off my student loan debt, then I’ll start saving for retirement.”

These folks don’t realize how costly the words “as soon as” can be.

Debt payments shouldn’t dictate other goals

Paying off debt is a worthy goal, but it shouldn’t come at the expense of other goals, particularly saving for retirement. Company matches and tax breaks are not retroactive. And the sooner money is contributed, the longer it can benefit from compounded returns.

Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.

“By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic,” said Kimberly Zimmerman Rand, an accredited financial counselor and principal at Dragonfly Financial Solutions in Boston. “If you can start saving today … you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four.”

Why people tackle one goal at a time

The desire to laser-focus on one goal at a time is understandable, said financial coach Linda Matthew. People see faster results if they put every spare dollar toward paying down debt, for example.

But much of life requires multi-tasking, and money is no different, she said.

“I’ve got to take care of the kids, and stay in a relationship with my husband, and keep the house clean, and earn some money,” said Matthew, who is an accredited financial counselor and owner of Money Mindful, a financial-coaching service based in Davis, Calif. “I can’t get into a relationship with my husband after I finish raising the kids; that’s called divorce.”

Busy lives make it tempting to try to focus on one goal at a time, Rand said.

People may pay the most attention to their most immediate need or something that is causing them pain, ignoring the rest of their financial life. “If you’ve got a bill collector calling, they’ve got your attention,” she said.

“As soon as” thinking can delay progress on any financial goal, Matthew adds.

One woman told her the reason her family hadn’t saved was that they planned to start as soon as they had extra money, and they never did.

“You can’t wait for that,” Matthew said.

How to multi-task

Financial experts recommend starting and maintaining a regular savings habit, even if it’s only $5 a week.

“I work with very low-income consumers, and I think most people can do this,” Rand said. “And then once your hours start to get more regular, maybe you’ve got a better job, now you can boost that amount.”

Rand also is a fan of making transfers automatic whenever possible.

“Setting it and forgetting it is actually a good thing when it comes to savings because then you don’t have to make that active decision every month,” she said.

O’Neill, who’s co-writing a research paper called “ ‘As Soon As’ Finances: A Study of Financial Decision-Making,” suggested dividing savings among different “buckets.”

One of the buckets is for retirement, one for emergency funds and perhaps one for a home down payment.

At the same time, target high-interest debt, such as credit card bills.

Once the system is in place, stick with it, O’Neill said. If a goal is achieved, or an expense such as an auto payment or child care ends, redirect that money to one of the other goals.

“You’re already used to paying that child care or whatever, and it’ll just fund everything a lot faster,” O’Neill said.

Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” E-mail: lweston@nerdwallet.com. Twitter: @lizweston.