Long- & Short-Term Goal Setting

by Morgan Rush ; Updated July 27, 2017
A long-term financial goal might include saving for a child's education.

Maintaining your finances can be compared to maintaining your home. You may have short-term goals, like washing the dishes after dinner or making the bed in the morning – items that require smaller amounts of dedication but, over time, contribute to a clean, tidy home. Long-term goals take considerable effort and may take more time to accomplish, but provide lasting results: for example, re-roofing the house costs more than making the bed but will keep you safe from wind and rainstorms for years. Similarly, setting long- and short-term financial goals help you tackle personal finances or work toward business growth.


Intentionally setting a financial goal makes it real, whether it’s a short-term or a long-term project. You may daydream about taking a family vacation for years “if there’s ever enough money,” but that goal likely won’t become a reality until you identify its specifics and work toward achieving steps along the way. Setting short-term goals helps keep your daily finances in working order, much like completing routine housekeeping chores contributes to a well maintained home. Establishing overarching long-term goals drives your financial decisions over the long haul, just as completing more complicated maintenance on your home ensures that it will still be standing for future generations.


Short-term goals may be accomplished in two years or less, and you may commit less money to these goals individually. Some people may feel comfortable managing several short-term goals at once; for example, paying down credit cards, establishing a savings account and saving to pay for a wedding. Long-term goals may take five years or more to accomplish, and you may contribute larger chunks of money toward these goals each month because of their higher overall cost. It may be overwhelming to manage more than two or three long-term goals at once; for example, saving for a down payment on a home, contributing to retirement funds and paying for a child’s college education.


You can set interlinking short-term and long-term goals so that achieved short-term goals contribute to your overall long-term goals. For example, perhaps personal debt has crowded out your ability to save for the down payment on a home. You may commit to paying down overwhelming credit card debt $500 monthly payments for two years as your short-term goal, then link this goal with plans to convert those $500 payments into down payment savings once you’ve eliminated debt and can focus on your long-term goal.


The best short-term and long-term financial goals share some qualities. Commit your goal on paper and post the goal where you can frequently see it. Solidifying your goals into something tangible creates accountability, making them seem more real. Next, quantify your goals by creating time periods during which you’d like to achieve these goals. Finally, commit specified amounts of money toward these goals. For example, as a short-term goal you may save $200 each month for two years in order to save $12,000 for your wedding celebration. As a long-term goal, you may divert 10 percent of your monthly paycheck into a retirement fund for three years, then boost savings contributions by 2 percent each year until retirement 10 years from now.

About the Author

Morgan Rush is a California journalist specializing in news, business writing, fitness and travel. He's written for numerous publications at the national, state and local level, including newspapers, magazines and websites. Rush holds a Bachelor of Arts from the University of California, San Diego.

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