Financial Planning (Long Term vs. Short Term Goals)

Usually, people will make short-term goals for expenses that they expect to make in a few months or years.


If you’re like most people, you need to set specific goals and plan ahead to achieve financial success and further your position in life. Whether you want to start a business, plan for retirement, or buy a new home, you’ll have a much easier time making your dreams a reality if you set concrete goals. However, one question that many people have is how far ahead they should plan for. After all, you can set goals with a 1 week time frame or you can set goals with a 5 year time frame. Unfortunately, setting goals with a time frame that is too long or too short can negatively impact your productivity and motivation. Here is some information about the differences between short-term and long-term goals for financial planning.

What Are Short-Term Goals?

In general, you can view your immediate expenses as short-term goals. The timelines for short-term financial goals vary. Usually, people will make short-term goals for expenses that they expect to make in a few months or years. Some examples of short-term goals include emergency funds, personal goods, travel, credit card debt payments, payments toward student loans, college expenses, insurance, or rent loans, wedding, travel, home improvements, and minor repairs. Depending on your current situation you may also be elegible for expense assisitnace or even qualify for free money such as Oprah’s Scholarships for high school students.

What Are Long-Term Goals?

Long-term goals refer to big-picture costs. These goals can take years or even decades to accomplish. In general, long-terms goals tend to involve more money. Also, these goals often demand regular attention. Some examples of long-term goals include starting a business, retirement fund, saving for the college tuition of a child, having a baby and paying off a mortgage. Long terms goals can also be a hedge against recession, remember that all financial marketets go through cycles and recessions are ultimatly inveetable.

The Gray Area

There is frequently an overlap between short-term and long-term goals that can make it difficult to distinguish between the two. Mid-term or medium-goals fall between long-term and short-term goals and often take a few years to accomplish. Some examples of mid-term goals include buying a car, paying off debt, and saving for a down payment.

Periods for goals can be difficult to estimate. For example, you may end up using an emergency fund right away. However, it is possible that you only end up using the emergency fund after a few years. There is no way that you can accurately predict when medical or car repair bills will suddenly appear. The amount of time that it takes to pay off your debts depends on how much you owe and how money money you can and want to contribute.

How to Budget and Save

It is important that you know where you stand before you start budgeting and saving for your short-term and long-term goals. You should figure out how money you can save and spend per month based on your income. Then, you should set a timeline for each of your goals and consistently work toward them. Depending on what your goals are and the timeline, you may need to cut back on buying the things you don’t require. Then, you should set the savings that you’ve made from cutting back on other expenses aside for these goals. You can use these savings to make good progress toward your short-term goals or make a dent in your goals for the long-term.

Sometimes saving is as simple as opening a basic savings account. When you are selecting a savings account there is a again a lot of information out there to help you make the best decision. Check out this guide on how to select the best savings accounts.

Where to Save

It is important that you find a safe place to store your savings until you need it. For your emergency fund and short-term goals, you want to keep the money in an area that can be accessed quickly like a savings account. On the other hand, for long-term goals, you may reach them quicker if you place the cash into a certificate of deposit or a savings account. You can also invest the money. This is particularly true if you don’t expect to use the money for five years or more. For example, if you want to save up for college for your newborn, you should consider investing the money.

Goal setting is the key to establishing a financially stable life for yourself. As you can see, distinguishing between short-term and long-term goals doesn’t have to be difficult. For more information about setting financial goals with different timelines, don’t hesitate to contact us.


  1. Hello how can one help my business in marketing and future. I will not give up been at my business 13 years. Please help my goals.!!!


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