Medium-Term Financial Goal Setting Explained
Today, I’d like to share a guide to intermediate financial goals. Also known as medium-term financial goals. Or, mid-term financial goals.
To do so, we will first answer the following question. What are intermediate financial goals?
And also, review these topics related to medium-term financial goals:
- The importance of intermediate financial goals
- 10 medium-term financial goals examples
- How to set your personal finance goals for success
Let’s dive right in.
10 Intermediate Financial Goals Examples
First of all, here is a solid list of medium-term financial goals examples. To consider in your financial planning efforts.
- Invest in yourself & further your education
- Get a higher paying job
- Reduce debt
- Save for a down payment on a home
- Buy a home
- Buy a rental property
- Save for something you value
- Save for something fun
- Plan for your children’s education
- Start a business
Next up, I want to make sure we are clear on today’s money management personal finance topic…
What Are Intermediate Financial Goals?
Let’s define our topic: mid-term or intermediate financial goals. To do so, I will take a top-down approach. Starting with the big picture…
First of all, what are goals? A goal is the desired outcome that a person envisions, plans, and commits to achieve.
Furthermore, what are financial goals? A financial goal is a result that you want to accomplish in an area of your finances.
Finally, what are intermediate financial goals? A medium-term financial goal is something you want to complete in the not too distant future. Most noteworthy, I define this as more than 1 year. But less than 5.
Intermediate financial goals can be contrasted with other types of financial goals. Like short-term and long-term financial goals.
Typically, short-term financial goals should be accomplished within 1 year after being set. While long-term financial goals are in the more distant future. Specifically, more than 5 years out.
So, intermediate financial goals sit right in the middle of your financial planning. And goal-setting timeline.
Think of it this way. Once you have completed your education. And, started full-time employment. You should be focused on short-term financial goals in your 20s.
For example, establishing an emergency fund. And budgeting your expenses each month.
Then, it’s time to start planning for the medium term. Today’s topic
Before setting your sites on your long-term financial goals. Such as achieving financial independence. Or, becoming a millionaire.
Now, we have defined intermediate financial goals. So, let’s be sure we understand the importance of this type of financial goal.
Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.
Why Are Intermediate Financial Goals Important?
Medium-term financial goals are important because they fall right in the sweet spot of our lives. They are the goals that define who we are. Our values. And, what we what to become as adults.
In contrast, short-term financial goals are the building blocks for security today and future success with money. Furthermore, achieving long-term goals is the reward for years of financial planning and hard work.
Many short-term and long-term financial goals will be similar from person to person. For example, everyone should have an emergency fund in the short term. And everyone should be planning for retirement in the long term.
But medium-term financial goals are the essence of who you are today. And what you will become very soon. Because how you choose to live your life and your mid-term financial goals are interrelated.
Therefore, when determining your intermediate financial goals. Decide what you value in life. Be intentional about it. And set your goals in lock-step with your values.
Now we know exactly what medium-term financial goals are. And, why they are important.
List of Intermediate-Term Financial Goals
Next, let’s discuss each of the 10 items on the list of intermediate financial goals examples. That I presented at the beginning of this article.
It is unlikely that all of these will fit any single person. Because everyone’s situation is different.
So consider this list of mid-term goals examples. They represent just some of the potential options.
I think you can find 1 or more that will improve your financial life.
1. Invest In Yourself By Furthering Your Education
First of all, the best investment you can make is in yourself. It should be part of everyone’s wealth building goals.
This is how I like to think about it… Find out what you are good at. Then, put in the time and effort to be great at that skill. Understand what you can dominate to make a good living.
Furthermore, adding to your educational credentials is an excellent medium-term financial goal. And after settling into full-time employment as a young adult is a great time to do so.
But don’t continue your education just for the sake of it. Make your educational goal measurable by putting a dollar amount to it.
For example, set your goal as a returning student to get a master’s degree and earn a 6 figure salary. Ask yourself, will the degree help me increase my income to that level.
If the answer is no. Maybe you should reconsider. And think about this next medium-term financial goal.
2. Get A Higher Paying Job
Make sure you are getting paid market value for your skills. If your current employer won’t pay up, then look for a new employer that will.
Sometimes changing employers is the quickest way to make more money. Especially when your skills have increased rapidly. And you have become more valuable.
This can happen anytime. But especially when you are trying to get ahead financially in your 30s.
On the other hand, I suggest this is an intermediate financial goal. Not a short-term goal.
Why? Because you shouldn’t make a hasty decision. And jump at the next highest-paying job that comes along.
Do your research. Figure out the best employers in your field. Network with people that work there.
Then, when the situation comes about. Make the right move to a higher-paying job. At the right time.
This process can take more than a year. Furthermore, the higher the salary. The longer it will probably take.
Resource: Level up your resume with MyPerfectResume
3. Reduce Or Eliminate Debt
Another good intermediate financial goal is debt payoff. Depending on your situation, this could take several years. Getting your debt under control is a key factor in avoiding financial problems.
And the first debt to look at is high-interest debt. That being your credit cards.
Interest rates on credit card debt are very high. There is no better use for the excess cash you can create than paying off your credit card bills.
Then look at your automobile loan. If you have one.
Next up is student loan debt. The average interest rate on student loan debt is about 6%. This isn’t too bad.
But I suggest you pay off your student loan debt after your credit cards. And, after paying off your auto loan.
Everyone’s debt situation is different. The rule of thumb is easy to remember. Pay off the highest interest debt first. Then move onto the next highest.
Finally, most people put off eliminating their mortgage. And put it in the category of long-term financial goals examples because it is generally a goal to complete before you retire.
4. Save For A Down Payment On A Home
Saving for a home or condo in an area you desire can be a good intermediate financial goal. But before you find your dream home. In that dream location to live. You must accumulate the money for a down payment.
Then that down payment becomes equity in your real estate. After you make your purchase.
Rather than paying rent, your mortgage payments increase your equity ownership in your home each month. And hopefully, the value of your home appreciates over the long run too.
5. Buy A Home
But perhaps you have been saving. And have that down payment on a home ready to go.
Then set a mid-term financial goal to locate your dream home in an affordable area. This is a big purchase. So, take your time.
Be careful. Do your research. And avoid making a hasty decision.
Establish your budget. Choose a desirable location to live. Investigate the different neighborhoods. Tour homes in person or online.
Because owning your residence can be expensive. Repairs, renovations, association fees all add up. And if you have to sell, real estate commissions will take a chunk out of your equity.
6. Buy a Rental Property
Beyond buying your own home. You can also invest in a rental property.
Of course, it may take you some time to make this big investment. So it is a good intermediate financial goal.
If you need a place to stay, you can also buy a rental property. Then keep an apartment for yourself.
For example, in a three-bedroom apartment, you can live in a single room while making a lot of money from renting out the rest of the property.
With the right planning. And business-oriented goal setting. Perhaps real estate can be a side-business for you in the future.
7. Save For Something You Value
Another possible medium-term financial goal is to save money for something you value. What you value is unique.
So, it’s hard for me to guess. But, here are a couple of financial goal examples to spur your thinking.
Maybe there is that “special someone” in your life. Do you need to save up for an engagement ring?
Furthermore, there might be a wedding to plan. That’s another good intermediate financial savings goal.
Finally, does your home need a facelift? Are you dreaming of that perfect kitchen or bath? Maybe you are expecting an addition to the family and need an extra room added on?
I don’t know what meets your needs. But in general, home remodeling projects are also excellent mid-term financial goals. Also, they add equity to your home value.
8. Save For Something Fun
Want to take the vacation of a lifetime? Travel the world for a year? Or, plan a trip to see an old friend from the past?
Then put some money aside. And gather positive energy by thinking about the trip coming up in the future.
Resource: Save money on all your online purchases using Rakuten
9. Plan For Your Children’s Education
First of all, not everyone has kids. Furthermore, not every parent plans to pay for their adult children’s education.
Finally, the type of financial goal depends on the age of your children. So, saving for college may be a short-term, medium-term, or long-term financial goal.
But for those who do have kids. Not planning for their education is a big financial oversight.
Also, if they are in their pre-teen or early teen years, the increasing cost of college is a big challenge. And you have about 5 years to get the savings in place.
This might be the only way to ensure your child gets the education you desire. Therefore, make an intermediate financial goal. And start your child’s college fund today.
When you are ready, make sure that you take a look at the 529 plans. Investing in a 529 plan is one of the most efficient ways to save for your kids’ college costs.
10. Start A Business
Running your own business is no easy thing. But, get it right, and it can be both personally and financially rewarding.
Here are a few things to consider if starting a business is one of your intermediate financial goals.
Create a business plan. It’s a financial misstep to start a business without a plan. So, consider what specific products or services you will sell. And, how to market them.
And what price will they fetch? Also, what size and scale do you need for your business to be profitable?
Create financial goals for your business. And tightly link them to your business plan.
Create a resource plan. You may go solo for a while. But when you decide to get help, it can be expensive.
If you decide to hire employees, then you’re going to need to pay them. This is another chunk out of your capital.
Create a capital plan. Money is one of the first things you’re likely to think about when starting a business.
To sum up, having a solid business plan is important. Including how you will achieve and measure the success of your business.
Becuase a good plan will help you secure money from a 3rd party, if necessary. Furthermore, it will allow for covering the costs of resources, you have determined necessary.
Finally, it will help keep you out of important financial troubles.
Okay. Take a deep breath. Because that concludes our review of 10 possible medium-term financial goals examples.
But hold on, there’s more. Next, I want to talk about how to set financial goals.
Because first, you must choose wise intermediate-term financial goals. Then second, you must know how to set those examples of financial goals for success. Here’s how…
Setting SMART Medium-Term Financial Goals
I suggest you learn about the SMART system for setting financial goals. Here is a brief overview of this goal-setting system.
In this case, each of your goals should have the following 5 attributes.
- Specific
- Measurable
- Achievable
- Realistic
- Time-bound
Allow me to explain…
Intermediate Financial Goals Are Specific
The first step in making a SMART financial goal is to make it specific. Answer these questions:
- Exactly what is to be accomplished?
- Who needs to be involved?
- Why is it important to achieve the goal?
The more details about the goal that you can document, the better. Because you will become more and more clear on exactly what you want to achieve.
Intermediate Financial Goals Are Measurable
Make your financial goals in life measurable. To do so, answer this: what information are you going to use to measure your progress in route to the goal. And measure whether the goal has been achieved?
Fortunately, medium-term financial goals tend to be easy to measure. They can usually be defined in dollars and cents. So, make yours measurable.
Intermediate Financial Goals Are Achievable
We want to stretch ourselves. And make challenging mid-term financial goals. The types of goals that will improve our financial situation in the next few years.
On the other hand, there is no need to set a goal if it can’t be achieved. By being specific, in step 1, you will come to understand whether the goal is achievable.
Also, do not try and set too many goals. The more you have. The less likely any one specific goal will get accomplished.
Intermediate Financial Goals Are Realistic
A realistic goal has 2 attributes. First of all, the goal should make sense for your current financial situation. Furthermore, make sure you have the resources to achieve the goal.
Intermediate Financial Goals Are Time-Bound
You must set a date to achieve your goal. First of all, having a deadline will increase your sense of urgency. Furthermore, a time constraint will increase your odds for success.
For mid-term financial goals, your deadline should be more than 1 year, but less than 5.
Okay. That wraps up a brief review of goal setting. Remember to make your goals SMART. And you will have a better chance to achieve them.
Next, take what you have from setting your SMART financial goals examples. And write it down if you have not already done so.
Documenting your financial goals is very important. It builds your commitment. And the act of writing things down helps you clarify your thoughts.
But that brings me to the next important question. Are there other things that should be done to ensure the achievement of your intermediate-term financial goals? The answer is yes.
How To Achieve Intermediate Financial Goals?
I think of achieving goals in 3 steps. Those steps are plan, act, and monitor.
Create a written action plan. A detailed step-by-step plan may not be necessary. It depends on the type of financial goal, and the complexity of the financial goal.
Challenging medium-term financial goals with deadlines in the 3-5 year range probably require a plan. An action plan is nothing more than the detailed steps required to achieve your goal.
Once again, just like creating a SMART financial goal. Write your action plan down.
Now it’s time to act. Work your action plan.
Next, monitor your progress. Since you used the SMART financial goal-setting process. Your goal is measurable. And it is time-bound.
So, measure your progress as often as necessary. For intermediate-term financial goals, it probably makes sense to assess your progress every 6-12 months.
Resource: Monitor your progress for free using Personal Capital
Okay. You made it this far. And it’s time to wrap up.
We have covered a ton of information. So now it’s time to start setting and working on an action plan towards your intermediate financial goals.
Here are some concluding thoughts…
The Complete Guide To SMART Intermediate Financial Goals: Wrap Up
Step back and take a look at your mid-term financial planning. And start taking the steps now to set and achieve your intermediate financial goals. In a few years, you will be glad you did. Here is a summary of today’s article.
Intermediate financial goals definition: A medium-term financial goal is something you want to complete in the not too distant future. Most noteworthy, I define this as more than 1 year. But less than 5.
Examples of medium-term financial goals discussed today:
- Invest in yourself & further your education
- Get a higher paying job
- Reduce debt
- Save for a down payment on a home
- Buy a home
- Buy a rental property
- Save for something you value
- Save for something fun
- Plan for your children’s education
- Start a business
Use the SMART system for setting financial goals by making them:
- Specific
- Measurable
- Achievable
- Realistic
- Time-bound
Finally, get busy by:
- Making a step by step plan for each goal
- Taking action
- Monitoring your progress
My Favorite Tools For Setting & Achieving Financial Goals
I mentioned several resources throughout the article. They are summarized here for your convenience.
- Level up your resume with MyPerfectResume
- Save money on all your online purchases using Rakuten
- Monitor your progress for free using Personal Capital
Author Bio: Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.