yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Short, medium and long term financial goals | Financial goals | Financial literacy | Khan Academy


3m read
·Nov 10, 2024

So it's very likely that you have different financial goals over different amounts of time. For example, you are likely, or maybe you should have, long-term financial goals. Long-term financial goals are like: I want to make sure I have enough money for retirement and to be able to retire at a certain standard of living; or I want to ensure that my children, or my future children, that I'm going to be able to pay for their college; or I want to save up enough money for a house; or eventually, I want to pay off that house. Those would all be long-term goals. We're talking about many years, probably over many decades.

Then you could have medium-term goals. You could say, let's say over the next year, I'm hoping to save ten thousand dollars. Maybe towards a down payment on a house, or maybe to help me purchase a car, or really just to have some rainy day money in case I lose my job or whatever else might be happening.

And then you could go all the way down to your short-term goals. Your short-term goals are: hey, this month I want to save 10% of my after-tax money; or it might be, I want to save 500 dollars; or I want to spend 10% less on eating out than I have the month before. Now it's really important to have these different lengths of goals, or these different times of your goals.

The way I think about it is, your long-term goals you shouldn't be changing them too frequently. I think some of the ones that I listed are good long-term goals for most people: that you want to be able to retire reasonably well, you want to help with your children's education, you want to be able to have enough money for children, or you want to buy a house.

Now, they might change if your circumstances change dramatically. If you're able to get a dramatically better job, or if you lose your job, or if you get married, these all could change your long-term goals pretty dramatically. But you're not going to be changing your long-term goals on a monthly basis.

Now on the other extreme, your short-term goals might change pretty frequently. Although even there, you should put some thought into it. This month it might be: hey, I want to see if I can spend 10% less on eating out, and then the next month you just want to maintain your new level, your more frugal level of spending. But maybe you have another short-term goal; maybe that month you want to figure out you want to be able to invest your money better.

As you say, look, I have money sitting there in a savings account. It's getting, you know, not even a one percent. Maybe I want to figure out if I could get a higher interest rate; I want to figure that out by the end of the month. Or maybe you have some other types of saving goal or spending goal.

So, it's useful because if you just had a long-term goal, it's really hard to maybe break that down about how that affects you this month. What I encourage you to definitely have those long-term goals, but then break it down. If you have, say, I want to save money for a down payment for a house, let's say you want to save fifty thousand dollars or a hundred thousand dollars over the next, let's say 10 years.

You can then break that down on how much you need to save per year; that would be a medium-term goal. Based on that, you have to think about, well, what should your budget look like on a monthly basis? How much money do you need to bring in? How much money can you spend? And based on that, you could set your short-term goals and see, oh, I'm actually tracking towards that medium and that long-term goal.

More Articles

View All
How Many 5 Year-Olds Could You Fight? -- And 18 Other DONGs!
Hey, Vsauce. Michael here. And I am now living in London. Besides popping on over to Disneyland Paris, I’ve also been looking at DONGs: Things you can Do Online Now, Guys. For instance, because I’m now in Britain, my team has changed for clickclickclick.…
Finding perimeter when a side length is missing | Math | 3rd grade | Khan Academy
What is the perimeter of the figure below? So down here we have this figure and we are asked to find the perimeter of this figure. Perimeter is the distance all the way around the outside of a shape. So in this case, if I were to walk around the outside…
Differentiability and continuity | Derivatives introduction | AP Calculus AB | Khan Academy
What we’re going to do in this video is explore the notion of differentiability at a point. That is just a fancy way of saying, does the function have a defined derivative at a point? So let’s just remind ourselves of a definition of a derivative. There …
Ask me anything with Sal Khan: April 16 | Homeroom with Sal
Hi everyone! Sal Khan here from Khan Academy. Welcome to our daily homeroom livestream. The whole goal of this is for all of us to stay connected during times of school closures. Depending on the day, this is a time for all of y’all to ask questions of my…
Worst Nuclear Accidents in History
Nuclear energy creates an uneasy feeling of danger for many people. Ancient and dangerous minerals are concentrated to awaken seemingly unnatural powers, creating horribly toxic elements that, if they escape, can and have killed people in horrible ways. H…
Simplifying radicals examples
Let’s get some practice rewriting and simplifying radical expressions. So in this first exercise, and these are all from KH Academy, it says simplify the expression by removing all factors that are perfect squares from inside the radicals and combine the …