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Short-Term, Mid-Term and Long-Term Personal Finance Goals: How to Iron Yours Out for 2022 Let's walk through short- mid- and long-term financial goals so you achieve exactly what you want, whether you want to start investing in cryptocurrency or put together a budget for...

By Melissa Brock

This story originally appeared on MarketBeat contributor/ - MarketBeat

I once did a presentation to a group of (unfortunately, disgruntled) employees about goal setting and received some feedback about the topic (not about my presentation skills, though they were probably referring to both):

  • "Goal-setting is boring."
  • "I like to live in the moment."
  • "Booooring." (Yes, there were several overlapping comments.)

The American Psychological Association revealed that in 2021, money constituted high and "somewhat significant" levels of stress for 61% of Americans. So why not implement personal financial goals? If planning for the future can help alleviate money stress, why not take care of it by setting three types of personal finance goals?

Let's walk through short- mid- and long-term financial goals so you achieve exactly what you want, whether you want to start investing in cryptocurrency or put together a budget for the first time.

Three Types of Personal Finance Goals

The Financial Industry Regulatory Authority (FINRA) has already made it somewhat easy for you by identifying three types of financial goals:

  • Long-term financial goals: Long-term financial goals usually take more than 10 years to accomplish and can refer to saving for retirement or paying off your mortgage.
  • Mid-term financial goals: Mid-term financial goals usually take three to 10 years to accomplish and can include saving for the down payment on a house or saving money to start a business. Mid-term goals can also involve the costs of saving for college (depending on the age of your kids).
  • Short-term financial goals: Short-term financial goals should take less than three years to accomplish and may include saving money to renovate a basement or saving for a vacation.

Putting very clear time frames on all the goals you want to achieve will help you identify concrete steps to get there. But how do you do it? Let's find out.

How to Set Financial Goals in 2022

Let's walk through each type of financial goal one at a time so there's no question about when you want to achieve a goal and how to do it.

How to Set Long-Term Financial Goals

Setting long-term financial goals doesn't have to be daunting, though you might feel as if you've been given a monumental task to map out your entire life on paper. Here's the deal, though: If you think of it that way, you'll always feel overwhelmed!

  • Step 1: Start by writing down exactly what you want to accomplish beyond the next 10 years. You may want to retire in Florida, save $2 million, sell your home, etc. Think carefully about what you want.
  • Step 2: Write down what it'll take to get there. If you have no idea, do some research on what you need to do to make it happen. If you need help to get your long-term financial goals off the ground, hire a financial advisor to help you achieve them.
  • Step 3: Assemble the right types of assets to get there. For example, if you need a stock-heavy IRA in order to make your $2 million dream happen, pull it together.
  • Step 4: Put your plan into place, automate your investments so you automatically contribute money each month and monitor them as time goes on.

Can't come up with everything you want to do beyond 10 years? It's okay. If you start with saving for retirement, you can always add goals to your list later on.

How to Set Mid-Term Financial Goals

Setting mid-term financial goals may seem a little more confusing. After all, it might be hard to pinpoint exactly what you might want in three to 10 years. You might want most "things" sooner than that!

  • Step 1: Consider the goals you may have between three and 10 years from now and write down as many as you can think of. Maybe you want to pay off debt or make more money. Maybe you have some upcoming milestones in your life — an upcoming big birthday or anniversary, for example.
  • Step 2: Identify mid-term investment options that might get you to where you want to be. You may want to place them in less-risky investment options so you can benefit from them when you need them. Many people will still put mid-term investments in well-placed stocks (but diversify them), certificates of deposit (CDs), corporate bonds and other types of accounts. You may also choose methods that can help you — not investments at all. For example, you may choose the debt snowball method to get rid of credit card debt (where you pay off your highest interest rate credit cards first).
  • Step 3: Make your investments automatic and monitor them so you know how well they're performing.

How to Set Short-Term Financial Goals

Short-term financial goals are obviously the goals you'll set to be able to access the money fairly soon. You'll want to be able to access the money within three years. Here's how to do it:

  • Step 1: Write down all the short-term financial goals you want to accomplish (even if they don't require you to open an investment account). For example, maybe you want to create a budget, create an estate plan, add to your retirement accounts or make more money. You may also want to write down goals that do require you to start a fund, such as building an emergency fund.
  • Step 2: Figure out how you'll make all those short term goals happen. Make your plans as clear as possible. For example, maybe you say you want to create your emergency fund by putting 5% of your money into a money market account. Or maybe you'll start looking for a side hustle that will go directly into your investment account or ask your boss for a raise.
  • Step 3: This step always involves the follow-through process! Implement your plan and follow it through to completion.

Get Your Financial Goals on Track in 2022

Goal-setting doesn't have to be exhausting. Spend just one hour thinking carefully about your goals and do a little research before the new year. If you have a spouse, significant other or family members who may want to chime in on your brainstorm session, let them. It can be a really productive way to plan for 2022 and your future.

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