Any practical savings plan will take into consideration timing. The time horizon for a specific goal determines how you will achieve it. Five-year goals will be approached differently from their 10, 15, or 20-year counterparts. Financial saving goals are traditionally divided into three time periods, namely: Short-term: Anything under one year, Midterm: One to five years, Long-term: More than five years.
Long-term goals are generally established 5 to 10 years down the road. Short-term goals can be best accomplished through investments in instruments such as CDs, money market accounts, and regular savings accounts. People generally consider investments for long-term goals, allowing time to tolerate temporary volatility in performance.
Having an understanding of the timelines of your goals is essential for developing a plan for saving towards them. A clear plan is important, whether the savings goal is for a trip next year or for retirement many years down the road. The next content will take a look at how you can save for your short-term and midterm periods more efficiently.
In a Hurry? Dial +18-503-850-342 Now!What are Good Saving Goals?
Current life and financial situations are what determine what you should be saving. You can leave comparison behind, but make sure you identify what is more important to you. Saving goals can entail:
- Emergency fund
- Saving to buy the home
- How to eliminate credit card debt
- How to educate a child
- Retirement savings
Creating realistic saving goals:
- Assess income, expenses, and time frame.
- Scissor hands work.
- Keep track of your spending with tools like Citizens Savings Tracker (r).
Facts prove that how you spend and distribute resources mostly result in a good saving goal, not how much an individual earns. Remember that the best saving plan for you is the one that works best for you.
Plan for Short-Term Goals
Some short-term goal-setting involves:
- Setting up an emergency fund
- Saving for something big, like a new TV
- Paying down a small debt
In a situation where you are saving for a short-term goal, you have to keep the funds as liquid as possible. Saving accounts or money-market accounts are usually the best options. Money market and CD accounts do not provide the same returns as investment accounts, but they are likely to offer better rates of interest than traditional accounts.
Plan for Midterm Financial Goals
Some examples of midterm financial goals include:
- Paying back student loans and other larger debts.
- How do I save up for a house deposit?
- It’s important to plan for renovating a house.
Mid-term savings could be done through savings accounts:
- Traditional savings, CDs, money market accounts, and bonds.
- Track your goals using a tool like Citizens Savings Tracker(r).
Longer-Term Plans for Financial Goals
A long-term perspective should be taken five to twenty years ahead. The following are some examples of long-term goals:
- Retirement savings
- How to pay for your toddler’s college?
- Second home purchase
- Take the family on a trip of a lifetime
If you are certain you will not need that money for a long time, consider investing it in illiquid assets such as stocks, funds, or real estate. They can offer much higher profits on investment than savings accounts. Yet, there are major risks associated with them. Investment accounts can even confer some tax benefits when used as part of your long-term savings goals, that is, when used in a retirement account or IRA.
In a Hurry? Dial +18-503-850-342 Now!Set Financial Saving Goals by Age
You can update your financial goals over time. Financials based on time, nearing retirement, may not seem far-fetched anymore. A few examples of financial goals that you would want to work toward may vary during the stages of life.
Your Financial Goals in Your 20s
Your financial goals may include:
- Financial independence from parents
- Pay off student loans and other bills, like car payments
- Start retirement contributions to take advantage of compound interest
- Build your credit score
- Establish an emergency fund
Your Financial Goals as You Enter Your 30s and Beyond
Your financial goals may include:
- How to pay off your student loan
- Taking financial measures before expanding your family
- Saving for your child’s education
Retirement savings by age 30, save one year’s salary; by 40, save three years’ salary.
Financial Goals in Your 50s and 60s
In your 50s and 60s, the following will be some of your financial goals:
- Plan retirement expenditure as you come closer
- Keeping your retirement account topped up
Bottom Line!
With our help, we can finance major milestones for your family, such as graduation and a wedding. Depending on their circumstances, financial goals may change with age. Others may carry on but not be with the same financial goals, and vice versa. Your saving goals may also be influenced by such factors as your financial responsibilities. Trained professionals at Bruner Wright PA can help you navigate this journey and accomplish your goals.
You can pursue your financial goals throughout your life. Keep your accomplishments in order: set the timeline for your objectives. Periodically assess your budget. Planning for your short-term and long-term challenges may not be that hard after all. Call Bruner Now!
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