Short-term financial goals are things you want to accomplish within the next three years. Here are some ideas to get you started:
- Create a fully-funded emergency fund
- Replace a vehicle
- Take a family vacation
- Complete a home improvement project
- Purchase a new laptop
Medium-term financial goals are things you want to accomplish within three to 10 years. Are any of these to-dos on your horizon?
- Purchase a home
- Buy a vehicle
- Pay for a wedding
- Pay for advanced education
Long-term financial goals are things you want to accomplish in 10 or more years. Think way into the future and whether you hope to:
- Save enough money to stop working
- Fund your child’s advanced education
- Start a business
- Financially support elderly parents
Time can be a money multiplier. So get started! The earlier you start saving and investing, the faster you accumulate money for reaching your goals.
Needs and wants
Needs and wants are different. For example, you need to save money for your future, but you might want to use that money for that super cool motorcycle. Spending too much on wants can make it difficult to cover your needs. As hard as it may be, focus on needs first.
Risk and reward are typically connected in the investment arena. Investments that offer the potential for higher returns tend to be riskier than those that offer lower returns. At the same time, taking more risk does not guarantee greater returns. Being too conservative or safe with your investments can also threaten your odds of success. Ultimately, you need to take the time to understand investment risk and your tolerance for it.
Life is constantly changing, especially in the military. It’s important to consider your goals as life evolves. Nothing stays the same for long. You may get married. You will PCS every few years. There are deployments, children, promotions, or periods of unemployment for a spouse to consider. All of these events will have an impact on your finances.
If you are married, it is very important to discuss your financial goals with your spouse. Everyone’s needs and wants vary. Discuss them together. Try the money management exercise below to get started.
What’s your financial philosophy?
Use this worksheet to spark a discussion about financial values and how you align with your partner on personal financial management.