Savings Basics — Setting Short-Term and Long-term Savings Goals

Setting Short-term and Long-term Savings Goals

Take time to write down your goals. It is a simple and powerful exercise.

Use notebook paper, stationary, a napkin, a spreadsheet on your computer—whatever works. The important thing is to think carefully about the things you really want in life, and write them down.

New clothes. A house. A car. Vacation. College education. Retirement. Many people want these things, but have no concrete plan to get them.

Prioritizing and setting financial goals allows you to develop a plan to achieve them. Your goals can and will change in different stages of your life. You should review and revise your plans at least once a year to make sure the methods and tools you’re using are aligned to help you meet your needs.

Short-term and long-term goals

Your financial goals fall into short-term and long-term categories.

Short-term Goals—take no more than one or two years to achieve. For example, you may want to start an emergency savings account that could support you and your family for three to six months.

Examples of short-term goals:

  • Build an emergency fund
  • Pay down debt
  • Save for a vacation

Long-term Goals—take longer than a couple of years to achieve. For example, you may plan to save $20,000 for the down payment on a house.
Examples of long-term goals:

  • Buy a car
  • Buy a home
  • Pay for your children’s college education
  • Save enough for a secure retirement

Be specific when setting goals

Try to be specific when setting goals specific with your financial goals. For example, “Save $5,000 to purchase a good used car” is more specific than, “Buy a car.”

Look carefully at your list of goals and ask yourself:

  • Which are my short-term goals?
  • Which are my long-term goals?
  • Which goals are most important to me?
  • How much money will I need to save each month to achieve these goals?

Keep your list in a visible place where you will look at it often. It will remind you of what’s important and what you are saving for.

My Money Goals

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