Broker Check

August 31, 2016 - How to Prepare for Intermediate Financial Milestones

August 31, 2016

You know you should be saving for retirement, but what about your other goals? Intermediate goals can be more challenging to plan for because they have a shorter timeframe ¬– three-to-seven years – and may be given short shrift by busy people who are focused on their long-term finances.

Identify your goals

Intermediate financial milestones, goals you want to achieve in the next three-to-five years, are important to your overall financial strategies. Think about what you want to accomplish over the next few years. Common goals might be:

  • Paying off debt.
  • Buying a first or second home.
  • Purchasing a new car.
  • Going on a dream vacation.
  • Starting a business.
  • Sending a child or grandchild to college.

After you identify your goals, think about what it will cost to accomplish each goal. If you’re not certain about the exact cost, come up with a minimum and maximum estimate to give yourself wiggle room later.

Set a timeframe

Once you’ve identified your goals and what they will cost, setting a timeframe for these goals will tell you how long you have to save the necessary money and give you a date to work toward. Much like training for a marathon, putting a date on the calendar can put you on the path to identifying what it will take to meet that goal.

Create a savings and investment strategy

Once you have identified your goals and set a reasonable timeframe for completion, it’s time to bring in your financial professional. He or she can help you develop a savings and investment strategy that breaks down your goals into annual (and even monthly) objectives to help keep you on track.

Assess progress regularly

The secret ingredient to accomplishing your goals is setting milestones and regularly assessing your progress. Without regular check-ins, it’s tough to know whether you are moving toward your goals. Much like a coach or personal trainer, your financial professional can help you stay focused and provide needed encouragement and feedback. If you’re not making progress, regular meetings can give you the accountability you need to get back on track.

With many of us focused on saving for retirement and meeting daily expenses, it can be easy to let other financial goals slide. However, taking time now to think about what you want to do with your life in the next few years can make it much easier to ensure that important goals aren’t left to chance.