Time is your ally when it comes to achieving your financial dreams. Many goals that would be out of reach if you tried to accomplish them within a year or two can be attainable if you work toward them steadily over a longer stretch of time. The first step is identifying your personal long-term financial goals, then establishing a plan.
Choose financial goals for the long run
When you think about setting good long-term financial goals for yourself, try to come up with ones that will benefit you or others further down the road. Once you have a few different ideas, ask yourself these questions about each one to help you weigh whether you think they're worth committing to.
- Is this a goal that will push you? Set your sights on things that you're strongly motivated to pursue.
- Will you care about this goal in the future? Things that seem important now might be just an afterthought in 15 or 20 years. For instance, you might not be interested in owning a bigger home once your kids have grown up and moved out.
- Is this goal in line with your values? Listen to your heart, and don't pick a goal based solely on what others are doing or what statistical averages might suggest.
- Can you realistically achieve it? Consider how long it might take to reach your objective. If a goal would require you to keep working full-time into your 90s, it's probably not something you want to count on. Similarly, if you couldn't achieve a goal unless there are dramatic changes in the economy or the stock market, it's likely too risky.
Take action: 6 common goals & tactics
After identifying a goal, you're ready to come up with a plan and take action. It's okay to only take small steps at first. Pursuing long-term financial goals is all about staying dedicated to your vision for your future and making progress bit by bit.
Financial priorities are highly personal, and how you go about attaining them will be, too. But common ones include:
Paying off a mortgage. Managing your debt. Saving for retirement. Sending kids to college. Giving to charity. Protecting yourself and loved ones with insurance.
Here's a look at a few different tactics for achieving those and similar money goals you may have in mind.
1. Early mortgage payoff
Paying off your mortgage sooner than scheduled allows you to build equity faster. Plus, once you get to the finish line of fully owning your home, you no longer have to make mortgage payments, and you can put that money toward another purpose. Just make sure your lender doesn't charge a prepayment penalty. That's a fee when you pay all or part of your mortgage off early.
Once you get the green light, you have a few strategies to choose from. One is to pay extra each month. Ask your lender to apply your extra payments to the loan principal, and you'll gradually chip away at what you owe. This won't dramatically cut your loan balance, but it's a doable method of paying off your mortgage a little more rapidly.
Another possibility is to refinance to a mortgage with a shorter term. This requires paying closing costs on a new home loan, which will typically add up to
2. Pay down your debt
You may want to try to
It's a good idea to find out the interest rates on any credit cards you have and on any student loans, auto loans or personal loans you hold. Consider paying down the credit lines with the highest interest rates—your most expensive debt—by prioritizing the minimum monthly payments on those accounts. Whenever you're able, pay above the minimum. This
If you get any unexpected funds, like a
Most importantly, try to avoid taking on more credit card debt while you're working to bring your balances down. Look at your spending categories, and check whether you're using your cards wisely.
3. Save enough money for retirement
If you build up an adequate nest egg, you could have more money to spend on travel or hobbies in your retirement years. Sufficiently
Use a
Make sure you're enrolled in a
Aim to build a balanced retirement portfolio that's split among different assets, like
And try to resist the temptation to tap into your retirement savings early. Ideally, you want your money to stay in a designated account so you reap tax advantages, avoid paying penalties and get to watch your funds earn a rate of return.
4. Save for college
Consider opening a
Another option is using a
5. Give back to charitable causes
Start by identifying a cause you'd like to support, and think about how you could make a difference that lasts into the future. You might want to save up to make a larger monetary donation or donate property like a used car. Another option is to contribute with your time. For example, you could consider planning to retire three months early and spending those last three months of your career in a full-time volunteer role.
Figure out how much money you'd need to set aside each year to bring your dream to fruition, and see how that fits into your budget. Think about whether there's anything you're willing to postpone or do without so you can make it happen. For instance, you might want to take a staycation rather than a trip across the country and put the money you save toward your charitable goal.
In addition, you may want to set up a dedicated savings account just for this purpose.
6. Protect your loved ones with insurance
It's hard to guess what life will bring over the years, but you can strive to stay prepared for whatever comes your way. Take stock of your insurance policies, and make sure you've covered the basics. In addition to mandatory coverage like auto insurance, you may need to buy health insurance,
Your insurance needs can change over time, so it's best to review your policies regularly and see if you're missing anything important. For example, you may want to buy term life insurance in your 20s or 30s while setting a goal to consider a

Plan—it's worth it
Choosing long-term goals that make sense for you may take some thought, but it's well worth it to make the effort and pave the way for greater financial well-being later in life. Consider connecting with a