Saving for Mid-Term and Long-Term Financial Goals

You might already know about the numerous essential reasons to save money regularly, but you might be wondering how you can target goals that you don't plan to reach for quite some time. Whether this means remodeling your house within the next four years or retiring within the next forty, making a plan is critical to reaching your financial goals. 

Identify Your Main Goals for the Next Several Years 

Before you can get motivated to put money away, you’ll need to identify what you hope to accomplish and when. Talking with a financial professional to clarify your thoughts could be helpful. Remember: 

• Your goals for the next two to three years fall under “short-term” 

• Your goals for the next seven or so years count as “mid-term” 

• Your goals for the next decade and beyond are your “long-term” 

For Mid-Term Goals, Start Saving as Much as Possible Right Away 

Because your mid-term goals are much closer than your long-term ones, you’ll want to start putting away as much money as possible right away, if you haven’t started doing so already. Keep in mind that mid-term goals often include such aspirations as: 

• Paying off debts such as a home mortgage or student loans 

• Buying a new car 

• Replacing the roof of your house or remodeling the kitchen 

• Going on a dream trip abroad 

To reach these goals in a relatively tight timeframe, you'll need a set plan. Here are some steps you can implement immediately. 

• Figure out how much your mid-term goals will cost and use that figure to calculate how much you'll need to put away each year to hit your target. 

• Start allocating as much as you can toward that target. 

• Take any extra savings at the end of this process and allocate them toward your long-term goals. 

For Long-Term Goals, Create Separate Accounts and Consider Investing Some Funds 

Long-term goals provide you a bit more time to save money, but that doesn’t mean you should procrastinate! These goals often encompass major life milestones, such as: 

• Saving up for your children’s university educations 

• Putting away enough money for a comfortable retirement 

• Saving for a “forever home” purchase 

To keep saving for these goals, you may find it motivating to use special accounts for each goal and invest your money wisely. Make sure you: 

• Create separate, dedicated accounts for each of your major goals 

• Consider investing some of your funds to maximize compound interest gains over time 

• Speak to an advisor about options such as money market accounts, stocks, and bonds 

• Put money into savings accounts and investments regularly, even if you have to start small 

Achieving your mid-term and long-term goals is entirely doable if you start planning early and saving strategically. By following these foundational steps, you can reach your financial goals on time and with confidence!