How to Create a Comprehensive Financial Portfolio with Planning for Emergencies, Education, Retirement, and Other Goals and Objectives

How to Create a Comprehensive Financial Portfolio with Planning for Emergencies, Education, Retirement, and Other Goals and Objectives

Setting short-term, medium-term, and long-term financial goals is an important step toward financial security. If you don’t have a goal in mind, you’ll probably spend more than you should. You won’t have enough money when you have unexpected bills or when you want to retire. You might get stuck in a loop of credit card debt and feel like you never have enough money to get the right insurance. This makes you less prepared for some of life’s biggest risks than you need to be.

Even the most careful person can’t be ready for every emergency, as the outbreak taught the world and as many families learn every month. When you plan ahead, you can think about what could go wrong and do what you can to be ready for it. This should be something you do over and over again, so you can adapt your life and goals to the changes that will happen.

Planning your finances once a year gives you a chance to look at your goals, change them, and see how you’ve done since last year. If you’ve never set financial goals before, now is the time to do so so you can get or stay on solid financial ground. Here are some short-term and long-term goals that financial experts say you should set to help you learn to live happily within your means, get out of debt, and save for retirement.


  • Setting goals, including short-, medium-, and long-term goals, is the first step in making a good plan for your finances and retirement.
  • Setting up a budget, getting rid of debt, and starting a backup fund are all important short-term goals.
  • Long-term goals should be focused on retirement. Medium-term goals should include important insurance policies.
  • Short-Term Goals for Money
  • Setting short-term financial goals helps you build the skills and confidence you’ll need to reach your longer-term goals. You can take these first steps pretty easily in as little as a year: make a budget and stick to it. Set up a fund for emergencies. Pay down your credit card bills so you can move forward.

Set up a budget.

When you can see how you spend your money and use that knowledge to guide you, you can make better choices about where you want your money to go in the future. Do you think it’s worth $315 a month to have fun and save time by eating out? If you can afford it, that’s great. If not, you just found a simple way to save money each month. You can look for ways to save money when you eat out, make some of your own meals instead of eating out or getting food, or do a mix of the two.

Make a fund for emergencies

A “rainy day” fund is money you save up to pay for costs that come up out of the blue. $500 to $1,000 is a good starting point. When you reach that goal, you’ll want to make it bigger so that your emergency fund can cover bigger problems, like losing your job. Before the COVID-19 outbreak, if you didn’t have an emergency fund, you probably wished you did. And if you did have one, you might have used it up and need to fill it up again.

Even though you probably have other savings goals, like saving for retirement, making an emergency fund should be your top concern. The savings account gives you the stable money you need to reach your other goals.

Pay off your debts.

Experts don’t agree on which should come first: paying off credit card debt or starting a backup fund. Some people say that you should start an emergency fund even if you still owe money on your credit cards. This is because if you don’t have an emergency fund, any unplanned cost will put you deeper in debt. Others say that you should pay off your credit card debt first because the interest is so expensive that it makes it much harder to reach any other financial goal. You can choose the theory that makes the most sense to you, or you can do a little bit of both.

Filing for bankruptcy should be your last option because it can ruin your credit for up to 10 years.

Midterm Financial Goals

When you’ve made a budget, started an emergency fund, and paid off your credit card debt (or at least made a good dent in these three short-term goals), it’s time to start working toward your middle financial goals. These goals will help you get from your short-term goals to your long-term goals.

Get life insurance and insurance for when you can’t work.

Do you have a spouse or kids who rely on your income? If so, you need life insurance to make sure they are taken care of if you die too soon. Term life insurance is the easiest and cheapest type of life insurance, and it will meet the needs of most people. A dealer can help you find the coverage with the best price. Most term life insurance needs a medical exam, but unless you are very sick, you can probably find at least one company that will sell you coverage.

Pay back your student loans.

Many people’s regular budgets are really hurt by their student debts. If you lower or get rid of these bills, you’ll have more money to save for retirement and reach other goals. Refinancing into a new loan with a cheaper interest rate is one way to help you pay off your student loans faster. But be careful: if you refinance federal student loans with a private company, you may lose some of the perks that come with federal student loans, such as income-based payments, delay, and deferral, which can help if you fall on hard times.

If you have multiple student loans and won’t save money by combining or reducing them, the debt avalanche or debt snowball methods can help you pay them off faster.

Think about what you want.

You can also set goals like getting your first home or, later, a holiday place as a midterm goal. You might already own a home and want to make big changes to it or start saving for a bigger one. Other examples of midterm goals are paying for college for your children or grandkids or saving money for when you do have children.

When you’ve set one or more of these goals, start figuring out how much you need to save to get closer to meeting them. The first step to getting what you want out of life is to be able to see it.

Long-term plans for the money

Most people’s most important long-term financial goal is to save enough money to be able to retire. The general rule is that you should save 10% to 15% of every paycheck in a tax-advantaged retirement account like a 401(k) or 403(b), if you have access to one, or a traditional IRA or Roth IRA. But to make sure you’re really saving enough, you need to figure out how much you’ll need to retire.

Estimate Your Retirement Needs

  • Estimate your desired annual living costs during retirement. You can get an idea of how much you need from the budget you made when you started working on your short-term financial goals. In retirement, you may need to plan for higher healthcare costs.
  • Take away the money you will make. Think about Social Security, income, and retirement plans. This will give you the amount that your investment collection needs to cover.
  • Estimate how much you will need in retirement savings for the date you want to retire. Use what you have now and how much you save each year as a guide. A retirement tool you can find online can do the math for you. If 4% or less of this balance at the time you retire will cover the costs that your Social Security and pensions do not cover, you are on track to retire.

Assuming a diverse mix of stocks and intermediate government bonds, this is the highest starting exit rate for retirement that has held up through all market cycles in U.S. history.

In conclusion

You probably won’t reach any of your goals in a perfect, straight line, but what’s important is that you keep going. If you have to take money out of your emergency fund one month because of a sudden car repair or medical bill, don’t beat yourself up about it. That’s what the fund is for. Just go back to what you were doing as soon as you can.

The same is true if you get sick or lose your job. You’ll need to make a new plan to get through that hard time, and you might not be able to pay down debt or save for retirement during that time. But when you get through it, you can go back to your original plan, or maybe an updated version of it.

This is one of the best things about planning your finances once a year: you can review and update your goals and keep track of how close you are to meeting them as life goes up and down. You will find that both the small things you do every day and every month and the bigger things you do every year and over many years will help you reach your financial goals.

Leave a Reply