Short-Term vs Long-Term Financial Goals
Financial planners talk (and write) a lot about differentiating between short-term and long-term financial goals. If you’re trying to create a budget, it’s important to know the difference between these types of goals. While it may seem self-explanatory at first glance, many people struggle with figuring out what the differences between short-term vs long-term financial goals are.
To help, this article will provide some common examples of these two types of financial goals, and a brief explanation of what makes them different.
Short-Term Financial Goals
Here are a few common examples of short-term financial goals:
- An emergency fund
- Catching up on rent, mortgage, or student loan payments
- Credit card debt payments
- Starting a travel fund
- Wedding expenses
- Minor home repairs and improvements
As you can see, short-term goals cover your more immediate expenses. Although everyone’s timelines vary, these are the things you generally want to buy or pay for within a few months, and up to a couple of years.
Long-Term Financial Goals
Common long-term financial goals include things like:
- Building a retirement fund
- Paying off a mortgage
- Starting a business
- Saving for your children’s college tuition
Long-term goals are typically your “big picture” costs. These goals may take several years or even decades to reach. Your long-term financial goals typically involve more money and regular attention than short-term goals.
Is There A Middle Ground?
Because everyone’s financial situation is a little different, some of the goals may take you more or less time to accomplish than other people, and that’s okay. Taking a little more or less time to achieve your goals is perfectly fine. Saving money, paying off debt, and planning for your future is not a race, and it’s not a competition.
At the end of the day, the plan you create needs to work for you. If it doesn’t, you’re far less likely to accomplish any of the goals you’ve set.
How To Get Started
Once you’ve identified your short-term vs long-term financial goals, you’ll need to take a hard look at your current financial situation and make some decisions. This can often be a challenge, and many people get stuck at this stage.
What can be helpful is speaking with an experienced financial planner. A financial professional can look at the goals you’ve set, along with your current financial situation, and make an unbiased recommendation about how to achieve them.
A financial planner may also be able to help you identify options and resources you didn’t know were available to help you accomplish your goals. To learn more about saving for short-term and long-term financial goals, please contact us today for a free financial planning consultation.
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