How to Set Financial Goals for Short-, Medium- and Long-Term Prosperity

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Woman writing down goals and organizing her financial plans
Inthon Maitrisamphan /

This story originally appeared on NewRetirement.

Everyone knows that if you want to achieve something, you had better set a goal.

However, very few Americans actually do or even know how to set financial goals. According to Schwab’s Modern Wealth Index, only 25% of people have some sort of written plan or goals. What’s worse, the Financial Health Network finds that only 29% of Americans are financially healthy.

It doesn’t take high-level calculus to figure out that there is probably a correlation. You will do better financially if you have financial goals.

While any financial goal-setting is good, get even better results by setting goals in all of the following categories:

  • Process-oriented financial goals
  • Short-term financial goals
  • Medium-term financial goals
  • Long-term financial goals

Keep reading for examples of personal financial goals in all of these categories.

Process-Oriented Financial Goals

Woman working and organizing her schedule and notes
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Process-oriented goals are about the “how” to achieve something, not about “what” you want to achieve.

A process-oriented goal is a goal you set for how you want to go about achieving your goals.

So, setting process-oriented financial goals is a way to help you ensure success. It will help you build habits for wealth and security.

You can set process-oriented goals around the who, what, when, where and why questions.

What and Where: Establish Systems

What kinds of systems do you want to set up for tracking and managing your goals for savings, spending and earning? A spreadsheet? Notebook? A planning system like the NewRetirement Planner?

When: Set Time Frames

How often do you want to check in on your key financial metrics? Some people reconcile their accounts daily, others monthly, some quarterly or even biannually or annually.

The more often the better. Make financial planning a habit!

Who: Get Buy-In from Household

If you are single and without any kind of family, then your financial planning is simpler.

Everyone else, your planning needs buy-in from everyone who is or might cost you something in the future.

Most importantly, you need to plan with your spouse. Here are 8 topics to tackle if you want to survive retirement with your spouse.


The question of “why set goals” is not exactly process-related, but it is critically important that you know these goals can help you immensely. Financial goals and a plan will do the following:

  • Lower stress: The American Psychiatric Association reports that 70% of adults worry about money. Get on track and stop stressing.
  • Enable you to avoid problems and generate wealth: The more you can get in front of your goals, the more problems you will be able to avoid and the more wealth you can create. Setting goals and planning your finances enables you to get ahead on taxes, saving and so much more.
  • Help you make better decisions: Every financial decision you make impacts your money today and all the way through the rest of your life. By making those decisions in the context of your short- and long-term goals, you are more likely to be successful and happy.

Short-Term Financial Goals

Woman excited about her own time

Short-term financial goals are things you can accomplish sometime between today — yes, you can get something crossed off the list today — and the next few months.

Here are six important short-term financial goals.

1. Determine Your Near- and Long-Term Financial Needs

A man scratches his head while trying to think
Cameron Whitman /

Do you know how much you need to retire? What amount of money should you have in an emergency fund? How much will it cost to send kids to college, help fund your parents’ long-term care needs, buy a home or second home, fund health care or pay for the vacation you really want?

Maybe none of that applies to you. You do want something in the future though.

It is really important that you know — right now — how much you are going to need to live the life you want to live.

Having a hard time visualizing your future wants and needs? Here are 7 ways to imagine the future you want to have.

2. Increase Your Savings Rates if Needed

Thinking woman holding orange piggy bank
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Once you have determined your near- and long-term financial needs, you may learn that you need to save more.

Set up a plan to increase your savings — perhaps gradually, over time. To make the goal-setting achievable and meaningful, you will want to be specific and detailed. For example, you might say that you are going to save an additional $5 every day or try for $500 a month with 50% of that going to retirement and the balance for other savings goals.

Automate: Not sure how to save more? Automating savings is one of the best things you can do today to set you up for a better future. Automating savings (especially if you schedule increases to correspond with salary bumps) ensures that savings will happen.

3. Set Up a Monthly Budget

adulting responsible adults saving money
Proxima Studio /

Tracking how you spend your money is a critical component of financial well-being. A budget will help you:

  • Manage spending
  • Reach goals
  • Save money
  • Reduce stress
  • Give you a sense of control

A budget does not need to be elaborate, just write down how much you have earned and how much you have spent (and on what) and also how much you have saved. Make sure your expenses (including savings) are below your income.

4. Develop an Investment Plan

Woman thinking about money
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It is not enough just to save money. You need to have it invested efficiently and appropriately for your personal situation — age, risk profile, needs and timeframe.

An investment plan is not about actively trading stocks. An investment plan is a thoughtful document that outlines your goals for your savings, strategies for achieving those objectives, a framework for making changes to your investment plan and options for what to do if things don’t go as expected.

An investment plan is one of the best short-term financial goals you can have because it sets you up for long-term success.

Learn more about creating an investment policy statement.

5. Have Debt? Set a Plan for Getting Rid of It

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Like setting a plan for saving more and investing strategically, you will also want to set goals for getting rid of debt — especially high-interest credit card or student loan debt.

We also strongly recommend that you document your debts in the NewRetirement Planner and run scenarios for accelerating debt payoff. See what happens to your lifetime wealth and security. This exercise can be powerful, fun and very motivating.

6. Develop Your Retirement Plan

Couple planning their investments
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As you can see, most short-term financial goals are about planning.

In life, you have a finite amount of time to create a finite amount of money. That money is used to fund your entire life. And creating plans is the best way to make sure that you will be able to accommodate your future needs.

Creating and maintaining a detailed retirement plan is a great way to visualize and manage your total pool of resources over your entire lifetime.

Medium-Term Financial Goals

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Medium-term financial goals might take you the next five years — or less — to achieve, depending on what tradeoffs you are willing to make.

Here are six important medium-term financial goals.

1. Build an Emergency Fund

Emergency fund
Ariya J /

Having an emergency fund — cash that is the equivalent of three months to a year of income — is key to your financial well-being.

An emergency fund is critical to keep you from accumulating debt or having to make compromised decisions if things go wrong.

2. Boost Your Credit Score


The credit-rating agencies and other services can give you great tips for boosting your credit score. A good credit score can help you with advantageous terms on loans.

Your credit score is especially important if you will be purchasing property in the future. However, your credit score can also impact the interest you pay on credit cards and your insurance rates.

3. Create a Long-Term Tax Plan

Woman doing taxes on laptop
Antonio Guillem /

Creating a long-term tax strategy can ensure that you have a much more secure retirement and it can help you retain much more of your hard-earned money.

The NewRetirement Planner enables you to see your potential tax burden in all future years and get ideas for minimizing this expense. It takes forethought, but strategizing Roth conversions, taxable income shifts and more can result in significant lifetime savings.

4. Think Through How You Spend and Want to Spend Your Time

Thinking senior woman
ESB Professional /

Over your life span, you will earn a finite amount of money. Similarly, you have a finite amount of time to spend.

When thinking about financial goals, how you want to spend your time is critically important. Do you want to:

  • Work harder to boost your income to get ahead so you can save more now?
  • Get a second job so that you have an even better chance of achieving an early retirement?
  • Enjoy life now, but work a little longer (maybe no big deal if you really enjoy your job)?
  • Scale back spending dramatically to sock away as much savings as possible?

Your income, what you spend and what you save are all related to both your financial and lifestyle choices.

5. Get Rid of Debt, Bonus if You Can Pay Off Your Mortgage

Woman reviewing credit card debt
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If you set a short-term goal of creating a plan to get rid of debt, your medium-term goal is to have it gone from your life.

Debt is a huge threat to your financial well-being. Having debt for things that give you utility — a mortgage or car — is acceptable. However, credit card and other kinds of high-interest debt can be akin to setting your money on fire.

Many people enter retirement with a mortgage. Financial planners usually advise against it, but a mortgage — especially at a low interest rate — is tolerable.

6. Retire Early!

A retired couple celebrates their freedom by taking time to enjoy the sunshine and fresh air outdoors
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Yep. It is entirely possible to set a plan for retiring in the medium term — no matter your age.

Retiring Young: You might want to learn about the Financial Independence, Retire Early (FIRE) movement. FIRE is basically about making some significant lifestyle choices immediately to try to amass a large amount of savings that will free you from having to work. Adherents of FIRE are retiring in their 20s and 30s!

Retiring from middle age to before 65: About half of Americans retire early — usually by 61, but many people stop working in their 50s. And, with a plan, you can achieve this goal. Here are some resources to help with your planning: 37 tips, tricks and hacks for an early retirement.

Long-Term Financial Goals

Blank notebook page for setting goals
jajam_e /

There are two key long-term financial goals:

1. Achieve Retirement or Financial Independence

You can retire when you have saved enough money and secured enough income to last for the rest of your life — no matter how long that turns out to be.

However, as you transition to retirement, you will still have goals and metrics to achieve. You want to:

  • Create a retirement drawdown plan for your assets — instead of figuring out how to save, you now need to determine the most efficient way to spend.
  • Your investment plan may evolve.
  • Taxes, medical costs, a plan for long term care and lots of plans B, C, and D — for anything that might not go as expected — are all really important for a secure future.
  • You need a retirement income plan — and ideally find ways to guarantee that income for both your and your spouse’s lifetime.
  • And, so much more …

2. Leave an Estate to Heirs

In addition to retirement, the other truly long-term goal that many people have is leaving something for heirs — either money or, in many cases, your home.

Use the NewRetirement Planner to track and manage your short-, medium- and long-term goals, including being able to see what kind of estate you might be able to leave behind.