Short-term goals are goals to be achieved within the next year
or so, such as saving for a vacation or paying off small debts.
Intermediate goals have a time frame of two to five years.
Long-term goals involve financial plans that are more than five
years off, such as retirement savings, money for children’s college
education, or the purchase of a vacation home.
Goal frequency is another ingredient in the financial planning
process.
Some goals, such as vacations or money for gifts, may be set
annually. Other goals, such as a college education, a car, or
a house, occur less frequently.
Goals for Different Financial Needs
Consumable-product goals usually occur on a periodic basis and
involve items that are used up relatively quickly, such as food,
clothing, and entertainment. Such purchases, if made unwisely,
can have a negative effect on your financial situation.
Durable-product goals usually involve infrequently purchased,
expensive items such as appliances, cars, and sporting equipment;
these consist of tangible items. In contrast, many people overlook
intangible-purchase goals.
Goal-Setting Guidelines—your financial goals should be stated
to take the following factors into account:
Financial goals should be realistic.
Financial goals should be stated in specific, measurable terms.
