How to save for short- and long-term goals

Prioritize Your Saving to Plan for Life Events

As you work toward financial milestones, life can feel like a trade-off between careful saving and unexpected spending. Achieving your ideal retirement may be decades down the road, but you never know when the car you’re driving today will need some extra attention at the mechanic.

“Prioritizing immediate expenses might seem counterproductive to building wealth,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “But taking on bad debt to cover an emergency can undermine your long-term goals.”

For simplicity’s sake, you can categorize your savings plan by the general amount of time you’ll need to achieve specific goals – short, medium or long.

Short-Term Goals

At minimum, you need to save enough to pay for the day-to-day expenses that should represent your monthly budget. Since you might need quick access to these funds, checking and savings accounts are preferable.

Building an emergency reserve should be a high priority for life’s unplanned expenses. You can begin by setting aside funds for a surprise repair bill, and continue saving until your rainy day fund can help you through a potential unemployment.

Medium-Term Goals

Vacations are a great example of goals that extend past your everyday budgeting. A trip to Europe may take longer to save for than a weekend getaway, so your needs might vary. However, there’s less of an immediate need to access cash.

Down payments on life’s big expenses are another example of a savings goal across multiple years. Financing homes, vehicles and weddings typically require large sums in advance. If you forego that up-front payment, you might pay more in the long run.

Long-Term Goals

Parents might sarcastically observe that raising children is the ultimate long-term expense, but saving for their education requires an even greater monetary commitment. Establishing a Coverdell account can help you dedicate a portion of your savings specifically toward future tuition payments.

As you develop and adjust your retirement planning throughout your career, time becomes almost as valuable as money. You can explore IRA accounts to find the right solution for your needs, and your future self will always thank you for allocating more money toward your golden years.


To reach your goals, you’ll need to manage your spending to allow for adequate saving and to keep you away from costly high-interest-rate debt. If you live like a king today, you risk becoming a pauper tomorrow.

The easiest way to save is make it part of your monthly budget and to do it automatically. Set aside whatever you can each paycheck for short-, medium- and long-term savings. You should consider having your funds automatically deducted from your paycheck to help avoid temptation. And when you get an increase in pay, you can increase your savings at the same time.

“You can’t have everything, but keeping a thorough inventory of your financial goals helps you focus on what’s important,” said Correnti. “Prioritizing those goals and your spending allows you to build your safety net, lifestyle and nest egg in steady installments.”

Read Next: Pay yourself today and start planning for tomorrow.

Next Steps: Check out some products and account types that could help with your investing plans.

The content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

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