Setting short-term, midterm, and long-term financial goals is an important step toward becoming financially secure. If you aren’t working toward anything specific, you’re likely to spend more than you should. You’ll then come up short when you need money for unexpected bills, not to mention when you want to retire. You might get stuck in a vicious cycle of credit card debt and feel like you never have enough cash to get properly insured, leaving you more vulnerable than you need to be to handle some of life’s major risks.
Even the most prudent person can’t prepare against every crisis, as the world learned in the pandemic and many families learn every month. What thinking ahead does is give you a chance to work through things that could happen and do your best to prepare for them. This should be an ongoing process so you can shape your life and goals to fit the changes that will inevitably come.
Annual financial planning gives you an opportunity to formally review your goals, update them, and review your progress since last year. If you’ve never set goals before, take the opportunity to formulate them so you can get—or stay—on firm financial footing. Here are goals, from near-term to distant, that financial experts recommend setting to help you learn to live comfortably within your means, reduce your money troubles, and save for retirement.
- Proper financial and retirement planning starts with goal setting, including short-, intermediate-, and long-term goals.
- Key short-term goals include setting a budget, reducing debt, and starting an emergency fund.
- Medium-term goals should include key insurance policies, while long-term goals need to be focused on retirement.
