Saving money is an important part of any comprehensive financial plan, but if you’re like the majority of people, it is often the hardest part of your budget, too! Having life goals to save for can often make the process easier, but if you have multiple targets in mind, knowing what to prioritize can still be difficult.
While every financial situation is different, by identifying your various savings goals and their respective timelines, you can have a much better idea what you should be saving for and how quickly you’ll be able to get there. Take a look at the categories below and check out some helpful questions to ask yourself as you determine what goals to prioritize the highest.
A Look at Various Savings Goals
What are Short-Term Saving Goals?
Loosely defined, a short-term savings goal would be anything that might be a more immediate expense—something you will need to spend money on within a few years’ time. An example of some short-term budgeting goal would be:
- Building up your emergency fund
- Paying off a car, credit card, or student loan debt
- A vacation or wedding
- Home improvement projects
What are Mid-Term Saving Goals
As with most things in life, there will often be a “grey area” of goals that do not fit neatly into short- or long-term savings plans—these are referred to as mid-term savings goals. This would consistent of expenses like:
- A down payment on a new home
- Buying a vehicle, boat, or other large expense
- Hitting a specified number as a personal savings
What are Long-Term Saving Goals?
A long-term savings goal would be a big-picture expense that you will plan to reach in more than a few years’ time. This would include expenses such as:
- Paying off a mortgage
- Hitting a college fund savings goal for your child
- Hitting a retirement fund milestone
- Purchasing a second home
How to Save Money for Your Life Goals
We all have goals like the ones mentioned above, but where most people get confused about saving is determining how to save for multiple things at once. While defining your priorities is never easy, it will make all your subsequent budgeting decisions much simpler once you do so. To decide how to budget for life goals with varying timelines, you can ask yourself a few questions:
- Do I have an emergency fund in place to cover expenses? (If not, you will want to tackle this before anything else!)
- How quickly should I target paying off the debts I carry?
- Do I have an extended amount of time to plan for retirement, or should I prioritize that above all else?
- Which goals will benefit my finances the most in the long term?
While budgeting is never easy, a qualified financial professional can be a major resource in helping you answer these questions and deciding where your money should go. Every situation is different, so having a unique and tailored strategy can make all the difference in setting you up for a successful financial future.
If you need help setting yourself up for financial success and hitting your savings goals, we would love to be a resource for you! Contact us today to see how we can help you ensure you are on-track for any short-, mid-, or long-term goal you can think of.