6 Medium Term Financial Goals You Should Have

What are medium term financial goals? At first glance, they may seem like a mundane topic that doesn’t deserve much attention. Don’t be fooled!

There is more to medium-term financial planning than meets the eye and it’s an essential component of any well thought out long-term strategy.

These intermediate financial goals tend to be squeezed in between short term and long term financial goals and often forgotten about. Because medium term goals are often viewed as less important than short-term or long-term financial planning, they can slip through the cracks.

This post will discuss why medium-term financial planning is so crucial for your success with longer term goals and you’ll learn what makes up a medium term goal. Let’s get started!

What Are Financial Goals?

Financial goals are the aims or targets that you have for your money and how you spend it. Examples of financial goals can include saving a down payment for your first home, paying off credit card debts or creating your retirement plan.

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Why You Should Set Financial Goals

You should set financial goals because they provide you with a way to properly manage your money. Without proper management of our finances, we can often find ourselves without retirement savings. No idea how to pay for a child’s higher education and unable to save money.

One of the money truths that people find hard to grasp is that controlling your money, and your plans for it, is essential.

To achieve financial stability and a secure financial future, you need to set goals for your money. Without them, there is no roadmap for your money and you can remain trapped by student loan debt and forever paying rent.

What are medium term financial goals?

Mid term financial goals are basically the same as short-term goals except that they last for a bit longer. These can also include some elements of your long-term goals, that can be accomplished in less than five years.

Setting financial goals in the short and medium term range help you keep your eye on where you need to go with your finances. Rather than just focusing on reaching a certain monetary target within a specific time.

A common way to set medium term financial goals is to identify part of a long term goal you have and make that into a medium term one. For instance, your long term goal might be to pay off your mortgage completely, but it’s $200,000 so not going to happen anytime soon.

Break that goal down into smaller goals that you can achieve in the next 5 years. You might set yourself a goal of paying off $30k in 3 years or $10k in one year. The goal setting you do is personal to you and your financial situation.

Using a medium term financial goal as a stepping stone towards a large, long term financial goal helps you keep focused and feel the achievement much sooner.

how long are mid-term financial goals?

With short term financial goals sat in the under 12 months range and long-term goals firmly in the 5 year+ range, mid term goals are sat nicely in-between them.

For me, I consider mid term goals to be anything from 2 years to 4 years (ish). But let’s not get picky, if you want a financial goal of 4.5 years then make it so.

Truth is, setting and achieving financial goals is less about what name or term you apply to them and more about getting on with the doing.

Why are intermediate financial goals important?

Intermediate financial goals are important because they bridge the gap between short and long term goals time frame. They are also usually part of a long term goal, a stepping stone to achieving something much more long term.

For example, your financial plans might include achieving financial independence (where you no longer have to work in order to afford to live). For most of us ordinary folk that is a very long term financial goal. One that is hard to envisage when you are still at the goal setting stage.

To help you start and stay on track to achieve your financial plan, you could set a series of medium term goals that are 3-5 years in length. Like building blocks towards your ultimate goal.

For more help with getting your financial plans up and running check out my post on the best finance books for beginners. Reading just one of these books can sky rocket your financial knowledge and confidence.

Vector of couple aiming to achieve medium term financial goals.
Financial planning starts with goals, short, medium and long term financial goals

6 medium term financial goal examples you might want to embrace

1. Pay off all credit card debt

Paying of your credit card debt is one of the most worthy financial goals to embrace. Credit cards are often the highest interest debt you have so it makes sense to throw extra money at this debt.

If you can transfer your balance to a credit card or two with low or zero interest rates then all the better. You’ll have more money to reduce that debt more quickly.

If you have more than one card then focus on the high interest debt first, no point paying off a balance which is at 9% when you have a few thousand that are being hit with 20% interest charges.

Many people swear the role of cutting up credit cards is an important factor in becoming debt free. It might not be for you but the truth is the benefits of being debt free likely outweigh the need for keeping that bit of plastic handy.

Once you’re debt free, the additional money you now have in your budget could be put to even better use. Whether that means being thrown into traditional savings accounts or your retirement account.

2. Invest in yourself by continuing your education

Financial literacy is important for all of us, but it is especially important for those that want to become financially independent.

The best way to ensure you continue your financial education and keep up-to-date is by reading and absorbing information. You don’t need to become a financial advisor to make good financial decisions. Just keep yourself up-to-date.

The more informed and savvy with money you are the better equipped you will be to deal with life’s curve balls (because they always happen) and become financially secure.

I recommend grabbing a copy of one of these books to beef up your financial knowledge. I’ve read them all and they’re not boring or dry (thankfully).

The Best Personal Finance Books

These are best personal finance books I recommend to anyone who wants to grow their knowledge and take control of their money. Try and buy a used copy - it's good money sense!

3. Create an emergency fund

In my book an emergency fund is both one of your short term goals and one of your mid term goals. Being able to fully fund your emergency fund with how much money you need to cover 6 months worth of expenses in just 12 months is not something many people can do.

Sure it’s one of those short term financial goals that every personal finance guru says you should do. But having been there, not had an emergency fund for a very long time, it’s not always doable for everyone.

Get $1000 in a savings account as quickly as possible in the short term. Then make it one of your mid term goals to hit the golden 6 months worth of expenses. Remember, that’s expenses not spending. Two very different amounts if you get hit with an emergency.

Related post: Emergency Fund Examples: 23 (Unexpected) Reasons Why You Need One

4. Pay off student loans

Student loans can run into many thousands. I have a friend who’s loans hit $300,000!! That’s a huge millstone around your neck for every year they remain.

Depending on the size of your loans, your financial goal might be to pay off a certain amount within 3 years rather than the whole lot through student loan refinancing.

At least with these loans they are often fairly low interest rates and they don’t impact on your credit score in quite the same way that credit cards can.

5. Save For A Down Payment On A Home

Everyone growing up wants to own their own home. When you reach the point where you get serious about your money and start the whole adulting thing of goal based financial planning, a home is top of your list.

The bigger the depoist you have the better mortgage rate you could be offered by your bank.

Saving for a down payment is the perfect medium term financial goal. It’s too big an amount to do it in 12 months and you don’t want to be waiting 5 years or more to purchase you home if you can help it.

Remember that this money should not be tied up in the stock market but kept in a savings account instead. Stock markets have a nasty habit of dropping just when you want to access your money. They’re great for long term investments.

You might have asked yourself, what’s the point of a savings account these days given the low interest they receive? Well they have their uses when the stock market is not appropriate. A house deposit is not long term enough for the stock markets, it’s safer in a savings account.

6. Pay off a chunk of your mortgage

Not everyone can afford to pay off their mortgage in full. So if you’re one of the many that just want to be mortgage free but aren’t quite there yet. Paying some extra money against your principal is a great intermediate goal.

This exactly what we did, no way could we pay off our mortgage in full in less than 5 years. Not a chance! Our retirement plans included being mortgage free.

Any additional money we earned or received, like a tax refund, we threw at the mortgage. To do this, we simply used this handy free tax calculator which proved to be a tremendous help as it allowed us to get an accurate estimate of our tax refund in advance.  When we managed to cut back on our annual living expenses by negotiating with insurance providers and the like, we put the extra straight into the mortgage account.

Paying off just an extra $50 extra per month will start to make inroads into the amount of money owed.

Vector of success with woman and man.
Mid term goals are as important as short term goals

How do I achieve my financial goals?

The key to achieving your financial goals is having good goal based financial planning. Most of all, you need a solid financial plan that outlines the steps you need to take to reach your money targets.

Some people chose to go down the route of using a certified financial planner to provide financial guidance on the best goals to set. But many of us either cannot afford this route or are happy to work out our own goals.

You know your money best. You know your monthly budget (you do have one don’t you??) And you know what you want to achieve when you set out to start saving money and creating a plan.

what are long term financial goals?

Long term financial goals are the aims or targets that you have over a long timescale, generally anything longer than 5 years. Fully funded retirement accounts, a mortgage free home and financial independence are all what I consider very long term goals.

What are short term financial goals?

Short term financial goals are the aims or targets that you have for your money within a shorter timescale than most of your other financial goals.

For me, short term means anything from a few days up to 12 months. I would include buying an engagement ring and paying off a $500 loan as short term finance goals.

Medium Term Financial Goals vs Long Term Financial Goals

Long term goals are typically considered those that are set out five or more years into the future, while short term goals refer to time periods of about one year. Medium term financial goals fall somewhere in between.

They are usually set for a period of three to five years and can include things like saving for a car, planning ahead for your wedding or building a large emergency fund.

Vector of couple feeding their tree.
When setting financial goals it’s important to be smart

Make your goals SMART

SMART is: specific, measurable, attainable, relevant and time-bound. A goal is not a SMART one when it’s too broad or if you don’t know how to measure your progress after the first few steps.

For example: “pay off my student loans as soon as I earn more money” isn’t a SMART finance goal because it can’t be measured. You need to define when you will be debt free and exactly what you will be paying toward your loans each month.

example of a smart financial goal

“Pay $50,000 off my mortgage in 6 years (give a specific date)”.

  • It is specific,
  • measurable (we know when it will be reached and how much we need to save every month),
  • attainable ($50,000 is a large amount money but you know your finances better than I)
  • relevant (you want to put this money towards reducing your mortgage)
  • and time-bound (you have a date by which you plan on achieving this goal).

3 good short-term smart financial goals examples

  1. “By next June, I will have paid $2000 off my credit card debt”.
  2. “In 6 months time (give date) I will have increased my credit score by 100 points” LINK
  3. “I will save $500 in the next three months (give a specific date).

This is specific (I will save 500 dollars) and measurable (it’s not just “save more money”). It also has a defined timeline. Which means you’ll be able to track your progress as you work toward achieving it. Finally, it’s realistic and achievable (presuming your finance calculations are sound).

How do I write out my goals?

The process of creating and writing your goals down can be as simple as putting them in a text document on your computer, phone or laptop. It can be as elaborate and creative as you like! Writing them out is an excellent way to inspire yourself and take action in the present moment.

You can write them out on a vision board, in a money journal LINK or on paper. Keep these some place visible, whether in your kitchen, your wallet or hanging up above your desk.

Vector of financial dreams about medium term financial goals.
Medium term goals help improve your financial health

Create your mid term goals today

Setting medium term financial goals is an important step in your journey to achieving long-term financial stability. They help us better plan for our future, set realistic expectations about what is possible, and chart a course that will lead us there.

Setting medium term financial goals can help you stay motivated and on track to accomplish your financial dreams. Your goals should be achievable and realistic to accomplish in the time you’ve decided on.

Your goals may change over the course of your lifetime but they are a great way to focus on what you want out of life today!

Whether it’s saving for a down payment on your first home or building up an emergency fund. These six examples of goals should get the wheels turning in your head about how you may want to prioritize which ones are most important for you! 

Start taking back control of your money by grabbing your copy of the Money Saving Starter Guide today.


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Last Updated on 16th August 2023 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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