Get All Access for $5/mo

Setting Sail for Success: Charting Your Course with Medium-Term Financial Goals It’s no secret that financial goals can be daunting. Having grand ambitions, such as paying off your mortgage or retiring early is admirable. But, at the same time, some of...

By Angela Ruth

This story originally appeared on Due

It’s no secret that financial goals can be daunting. Having grand ambitions, such as paying off your mortgage or retiring early is admirable. But, at the same time, some of these goals can sometimes feel distant and overwhelming.

Imagine there was a bridge that connected the excitement of a quick win with the distant shores of a long-term goal. Well, fortunately, there is.

A medium-term financial goal is something you want to accomplish in one to five years, such as saving for college, purchasing a car, or starting a business. As a result of these goals, you are usually exposed to moderate risk, which means that your income, expenses, or returns may fluctuate. If you want to achieve your goals, you must plan your income and expenses and invest part of your money in a diversified and flexible way, such as a mutual fund or a CD.

You can think of medium-term financial goals as your trusty sailboat. You achieve a clear, attainable goal by guiding you through economic uncertainty.

With that said, let’s look at how to chart your course with medium-financial goals successfully.

Medium-Term Magic: The Sweet Spot of Financial Planning

There’s no denying the importance of goal setting. Despite what you might think, goal setting is positively associated with success. The reality is that without a goal, life tends to get in the way of you achieving your potential.

The question is, why bother setting mid-term goals if you have already set short-term and long-term ones?

In short, with medium-term financial goals, you’ll find the perfect balance between:

  • Specificity. They require concrete definitions, unlike long-term aspirations. For example, “save $5,000 for a car down payment” instead of “buy a new car.”
  • Attainability. While they are close enough to motivate you, they are far enough away that you must be committed and strategic about your strategy.
  • Momentum. By achieving these goals, you fuel your confidence and lay the foundation for more significant achievements.

Overall, the concept of a mid-term goal is to break down the marathon mentality of long-term goals into smaller, manageable components. As a result, you will have a greater chance of success in the long term if you set appropriate mid-term goals.

Additionally, according to a 2023 survey conducted by the American Psychological Association, money and the economy were the top stressors for Americans.

It was reported in August 2023 that Americans had a total credit card debt of $1.03 trillion in the second quarter of 2023, a record high.

It is possible to alleviate this stress by facing your financial reality head-on, setting clear goals, and staying on track with them.

Anchoring Your Dreams: Finding Your North Star Goals

Is it possible to identify your own financial north stars? Absolutely. And here’s a compass to guide you:

  • Self-reflection. The first step is to understand your aspirations. Do you dream of taking a memorable vacation or being your own boss? As such, take time to figure out what medium-term financial goals you wish to set
  • Identify your “big why.” Having a compelling “why” for your goal is crucial. What will you gain from achieving it? Do you think it will reduce your stress, enhance your lifestyle, or open up new opportunities for you in the future? You will be more committed to your goals when you have a clear purpose behind them, adding emotional fuel to your journey.
  • Determine your needs vs. wants. Before you indulge in luxuries, prioritize necessities such as saving for emergencies and repaying your debt. It is essential to remember that a solid financial foundation fosters future opportunities.
  • Realistic assessment. You should look at your income, expenses, and existing financial obligations. Decide what is realistically possible within the timeframe you have chosen.

Charting Your Course: Turning Dreams into Actionable Plans

Now that you have identified your goals, it is time to turn them into actionable steps:

  • Establish your timeline. A medium-term goal typically spans one to five years, providing an achievable yet impactful timeframe. Determine the appropriate duration depending on your goals’ urgency and complexity.
  • SMARTen Up. Make your goals Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). You’re more likely to succeed if you set smart goals. For instance, “save $500 per month for a down payment on a house within two years” instead of “save more money.”
  • Break it down. When the goal is divided into smaller benchmarks, such as monthly or quarterly — the goal will be easier to accomplish. Taking this approach allows you to celebrate milestones along the way as well.
  • Budgeting with precision. Determine where you can make savings by analyzing your spending habits. You are one step closer to your goal with every dollar saved.
  • Income boosters. Think about side hustles, freelance work, or negotiating a raise to increase your income. The more income streams you have, the faster your progress will be.

Financial Tools: Your Nautical Crew

Managing your finances requires reliable tools, just as it does for any seafaring adventure:

  • Automated saving. You can automate your savings with apps like Acorns, Chime, and Digit.
  • Budgeting apps: You can track your spending and stay on top of it with apps like Mint and YNAB.
  • Investment platforms. Consider diversifying your portfolio with a robo-advisor or learning about individual investments.
  • Financial calculators. You can find free calculators and credit counseling services from nonprofits like the National Foundation for Credit Counseling.
  • Debt management resources. Develop a repayment plan with the help of a professional if debt is a problem.
  • Government resources., for example, provides financial literacy information and guidance.

Weathering the Storms: Overcoming Challenges

Despite smooth sailing, rough seas are part of every sailing trip. You should be prepared for:

  • Unexpected expenses. Ensure you have an emergency fund in place to deal with unforeseen events — because the unexpected will happen at some point in your life. It’s widely advised that you have 3-6 months worth of expenses stashed away.
  • Temptations. Be careful not to let instant gratification lead you astray. Don’t let fleeting desires distract you from your medium-term vision.
  • Motivation dips. Don’t underestimate your accomplishments. Keep yourself inspired by seeking support from friends, family, or online communities.

Landing on Success: Celebrating and Refocusing

When you arrive at your medium-term destination, savor the success. Don’t forget to recognize your dedication and hard work. Now that you’re more confident and experienced recalibrate:

  • Celebrate your achievements. Celebrate all your milestones, no matter how big or small. In addition to keeping you motivated, positive reinforcement also reminds you of how far you’ve come.
  • Evaluate & adjust. There will always be curveballs in life. In the event of unexpected expenses, income changes, or market fluctuations, your goals may need to be adjusted. While maintaining your medium-term vision, be flexible and adapt your plan.
  • Set new sails. As your skills and momentum grow, focus on bigger horizons. Keeping an eye on medium-term goals is crucial, but they are not the final destination.

Living the Dream: Financial Peace is Within Reach

A medium-term financial plan can help you make your aspirations a reality. As a result, discipline and confidence are fostered, paving the way for the pursuit of financial freedom in the future.

Further, you will most likely get lost when you set sail without a destination.

So, what are you waiting for? Start charting your course, raising your sails, and advancing toward a brighter financial future. Watch your financial dreams come true as you define your goals and embrace the journey.


What are medium-term financial goals?

A medium-term goal typically spans 1-5 years and bridges the gap between short-term (less than a year) and long-term goals (5+ years). They can help you build wealth, improve your financial standing, save for a down payment, or take a dream vacation.

Why are medium-term goals important?

  • They provide direction and focus. In contrast to abstract long-term dreams, medium-term goals offer a clear road map. Keeping you on track and motivated, they help you break down your overarching financial vision into smaller, actionable steps.
  • They offer a sense of accomplishment. Achieving milestones within a shorter timeframe boosts your confidence and makes you feel accomplished. As a result, you are motivated to keep going and remain committed to your goals.
  • They allow for flexibility and adaptation. Finances are unpredictable, as is life. If you set medium-term goals, you can adjust your course if necessary without derailing your whole financial plan. While maintaining overall progress, you can adapt to changing circumstances.

It can also increase your financial discipline and confidence to accomplish even a few medium-term goals.

What are some examples of medium-term financial goals?

Your specific situation and aspirations will significantly influence your choice of effective medium-term financial goals. You might be inspired by these examples, however:

Debt Management:

  • Pay off high-interest credit card debt. The most expensive debt should be tackled first, as this will save you money on interest and boost your credit score.
  • Increase monthly loan payments. Pay more towards car loans or student loans than the minimum to reduce interest and shorten repayment periods.
  • Save for a lump sum payment. Invest aggressively to reduce your monthly payments or total interest on a future loan.

Savings & Investments:

  • Build an emergency fund. Aim for 3-6 months’ worth of living expenses for unexpected costs.
  • Save for a down payment on a house. You should set a realistic goal based on the type of property and the location you are looking for.
  • Open a Roth IRA. By contributing to a Roth IRA, you can grow your retirement savings tax-free.
  • Max out your employer-matched retirement contributions. Take advantage of your employer’s free money!
  • Invest in a diversified portfolio. Over time, you can grow your wealth by investing in stocks, bonds, and other assets.
  • Start a business savings account. Provide funds for marketing, equipment, and other business needs.

Personal Growth & Lifestyle:

  • Complete a professional certification. Make sure you invest in skills that will increase your earning potential.
  • Take a financial literacy course. You can make better financial decisions by gaining knowledge about money management.
  • Save for a dream vacation. Track your progress toward planning the trip you’ve always wanted.
  • Upgrade your living space. Put money aside for renovations or a down payment on a new home.
  • Improve your health and fitness. Make healthier habits a priority, such as joining a gym or purchasing fitness equipment.

Remember to:

  • Make your goals SMART. Specific, Measurable, Achievable, Relevant, and Time-bound.
  • Track your progress. To stay motivated, use tools such as spreadsheets and budgeting apps.
  • Be flexible. As circumstances change, adjust your goals, but don’t give up easily.

Each person has different circumstances and aspirations, so there will be no one-size-fits-all solution for achieving medium-term goals. If you want to set your own financial goals, consider your values, financial priorities, and risk tolerance.

How can I stay on track with my medium-term financial goals?

  • Create a budget and track your spending. Identifying areas of savings and cutbacks will help you identify areas to cut back on.
  • Automate your savings. Each month, set up an automatic transfer to your savings account. It will be easier to stay on track if you do this.
  • Find an accountability partner. Encourage a friend or family member to help you achieve your goals.
  • Celebrate your successes! Whenever you reach a milestone, reward yourself.

What are some common mistakes to avoid when setting medium-term financial goals?

  • Setting unrealistic goals. By setting too ambitious goals, you risk failure.
  • Not being specific enough. Your goals should be clearly defined and measurable.
  • Not tracking your progress. Monitoring your progress toward your goals will allow you to adjust as needed.
  • Not having a plan. Make a plan to reach your goals rather than just wishing for them to happen.

Image Credit: Tiana; Pexels

The post Setting Sail for Success: Charting Your Course with Medium-Term Financial Goals appeared first on Due.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

'We Pulled Off An SEO Heist': Entrepreneur Stole 3.6 Million Pageviews From Competitors — And Your Business Could Be Next.

This has huge implications for businesses that rely on Google's organic traffic for revenue.

Business News

Wells Fargo Reportedly Fired More Than a Dozen Employees for Faking Keyboard Activity

The bank told Bloomberg that it "does not tolerate unethical behavior."

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Starting a Business

Spend Less Time Worrying About Your Company's Runway — And More Time Rethinking Your Strategy. Here's How.

Perceived short runways leave founders in angst. It does not have to be this way; the best way to extend the runway is the right strategy.