Ready to reach your savings goals? Learn the best strategies for short-, mid-, and long-term financial planning to secure your future with Vanguard.
Nicole Townsend, CFA
Nicole Townsend leads Investment Product Strategy in Vanguard Personal Investor, where she conducts investment product research to inform decision-making and strategic action on Personal Investor's product portfolio. In her role, Nicole advocates for the needs and preferences of Vanguard clients as part of the enterprise investment product research process focused on Vanguard's mutual fund and ETF offerings. Prior roles Nicole has held include strategy engagement manager for Vanguard Wealth Management, fixed income specialist in the Portfolio Review Department, as well as a variety of roles held within the Finance division.
Nicole earned a B.A. and a B.S. from the University of Delaware and holds the FINRA Series 7 and 63 licenses. She's a Chartered Financial Analyst® (CFA®) charterholder and a member of the CFA Society of Philadelphia.
Garrett Harbron
Garrett Harbron, J.D., CFA, CFP®, is Vanguard's head of advised wealth management strategies. He leads a team that conducts research and analysis on a wide range of retirement and wealth planning topics for Vanguard's advice offers globally. He previously was head of global wealth planning methodology. Garrett's areas of expertise include employer-sponsored defined benefit and defined contribution plans, retirement planning, portfolio tax optimization, estate planning, asset allocation, passive and active strategies, and alternative investments. He also serves on Vanguard's Advice Policy Council. Garrett joined Vanguard in 2011 and has served in the Investment Strategy Group as a member of a research team focusing on retirement planning, indexing, ETFs, and advice. Prior to joining Vanguard, Garrett worked for Merrill Lynch as a financial advisor, at Oppenheimer Funds as a retirement plan consultant, and at Wells Fargo Advisors as a compliance consultant. He also practiced law in the United States for five years. Garrett earned a B.A. in economics from Indiana University and an M.B.A. and J.D. from the University of Cincinnati. He holds the Chartered Financial Analyst® and CERTIFIED FINANCIAL PLANNER® certifications.
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How to set and achieve your savings goals
If you're looking to achieve a financial goal, a crucial first step is clearly defining it. That can help you make a concrete plan for seeing it through.
You'll want to start by determining the timeline for your goal. Saving for something you hope to pay for in the next year, like a wedding, requires a different plan than a long-term goal like retirement. Next, come up with ways to save for your goal and put your plan into action. Once you see your progress, you'll be motivated to keep working toward it.
Short-, mid-, and long-term savings goals
Because life is a balance between short-, mid-, and long-term goals, it's helpful to categorize your savings accordingly. By structuring your savings this way, you can also use the most appropriate investment strategy for each time frame.
Short-term financial goals
A short-term savings goal is one where you'll need the money within 3 years.
Examples of short-term financial goals
Some common short-term goals include starting an emergency fund, purchasing a new appliance, or going on vacation.
Investment considerations for short-term financial goals
If you're planning to use the money soon, it's smart to think carefully about how you invest it. For anything you expect to spend within the next 12 months, sticking with cash options—like high-yield savings accounts, money market funds, or cash management accounts—can help keep your funds stable and accessible. But if your goal is a little further out, say 2 to 3 years, you might want to consider a conservative investment mix that could include bonds, CDs (certificates of deposit), and maybe even a small slice of equities. This gives your money a chance to grow while still managing downside risk.
When it comes to parking cash for near-term goals, cash management accounts can offer a nice balance of flexibility1 and security. For example, the Vanguard Cash Plus Account offers a competitive annual percentage yield (APY),2 a dedicated routing and account number you can use for bill payments,3 and FDIC insurance up to $1.25 million.4
Put your cash to work to help reach your savings goals.
Mid-term financial goals
A mid-term goal is one you're looking to achieve in 4 to 10 years.
Examples of mid-term financial goals
Some common mid-term goals include a wedding, a down payment for a home, a new car, or paying off debt.
Common mid-term financial goals and their average costs
- Down payment on a home: $54,310.
- Wedding: $33,000.
- New car: $47,962.
Sources: Bankrate as of January 2025, theknot.com as of 2025, and Kelley Blue Book as of March 2025, respectively.
Investment considerations for mid-term financial goals
Since you've got a bit more time to ride out market ups and downs, you can consider moderately aggressive options—like bonds and bond funds or balanced funds—that carry more risk than cash but also more potential for growth.
How you invest will depend on when you plan to reach your goal within that 10-year window. If it's within the next 4 years, a more conservative approach makes sense. If it's closer to the end of the decade, adding more stocks could help boost your growth potential. And as you get closer to making that purchase—whether it's a home or a car—it's a good idea to gradually shift more of your portfolio into cash to help safeguard what you've saved.
Long-term financial goals
Most people associate investing with long-term financial goals, which are goals you're hoping to accomplish in more than 10 years.
Examples of long-term financial goals
Many people share the same long-term goals, like retirement or paying for a child's college education. These are so common that there are specialized investment accounts designed to help people save for them.
Investment considerations for long-term financial goals
When it comes to long-term goals, many people prioritize saving for their children’s education and college savings plans. That's why many families explore education-focused savings options like 529 savings plans. These plans offer federal and state tax perks—think tax-deferred growth and tax-free withdrawals for qualified education expenses.5
Saving for retirement is another major milestone to plan for. Accounts like 401(k) plans and IRAs are popular tools to help you save. If your employer offers a 401(k), it's a great way to get started. And if they don't, or you want to save even more, an IRA can be a smart option with its own set of tax advantages.6
Because you've got time on your side, you might also consider investing more heavily in stocks, which aim to deliver long-term growth. Just keep in mind that stocks can be a bit of a roller coaster, so it's important to know how much risk you're comfortable with. Our Investor Questionnaire can help you figure that out.
Align your savings goals with your financial plan
Integrating your savings goals into your broader financial planning goals is important because savings are an essential part of your overall financial picture.
Knowing your goals is a key first step that can help you decide what type of accounts to open and what investments to choose. For example, if your goal is to retire in 20 years, you might want to open an IRA and invest in stocks. But if you want to retire before age 59½, you might also want to invest in another account type since IRA withdrawals before age 59½ may be subject to penalties.6
If you have a goal in mind but still aren't sure how to start saving for it, don't hesitate to seek guidance. Using tools and calculators or getting professional financial advice can help put you on the right path toward achieving your savings goals.
Incorporate goals-based investing
Goals-based investing helps you create an investment strategy to meet your personal goals. This approach helps you make informed, effective choices to keep you on track. For example, you'll be able to choose investments based on your particular situation, including your goal timeline and risk tolerance.
When can setting a savings goal help you?
Setting clear savings goals can help increase your chance of achieving them, especially for scenarios like building up your emergency fund or saving for a big purchase. That's because:
- Goal setting provides direction. Having a clear goal in mind helps you choose a target, which can make planning easier. Once you know what you're working toward, you can make decisions about your timeline and select suitable investments or savings vehicles.
- Having a goal helps with budgeting. It's easier to make sacrifices when you know what you're saving for. And a budget can help you identify areas where you might be able to cut back and redirect that money toward your savings goal.
- Knowing your goal can motivate you. Seeing the progress you make toward a tangible goal can encourage you to continue saving. Your goal can also help you consider your full financial picture and think more about the long term, which can help you make better financial decisions overall.
How to prioritize savings goals
Since most of us have multiple goals, it's helpful to evaluate how each one fits into your financial picture. Following the steps below can help you assess your evolving goals and understand how to balance them.
- Identify essential versus discretionary savings goals. Essential savings goals are necessary for your basic needs, financial security, and long-term stability. These goals take priority because they protect you from financial stress and help ensure you have money when you need it. Discretionary goals are those that are nice to have but not necessarily required for you to meet your basic needs. They can add quality to your life and be rewarding but shouldn't come at the expense of your essential savings.
- Assess the timeline and urgency of each goal. Determine whether each goal is a short-, mid-, or long-term objective. You'll also want to assess the urgency of each goal. For example, an urgent home repair or medical expense needs to be addressed quickly, and will likely take priority over other goals less urgent and achieved over time, like a vacation.
- Allocate your funds to help you reach your goal. You'll want to find the right mix of asset types for your goal, which will help give you control over how risky your portfolio is. There's no good or bad allocation—you just need to find the one that's right for you based on your situation and goals.
- Check in along the way and adjust as needed. Review your progress periodically to confirm you're still on track to achieve your goals. If anything changes in your life, consider adjusting your approach. For example, if your income increases, you may want to increase the amount you're contributing toward your goal. By regularly revisiting your goals, you can continue saving toward them and ensure they stay aligned with your financial priorities and timelines.
By taking the time to thoughtfully prioritize your savings goals, you're setting yourself up for greater financial clarity and confidence. Remember, your goals may shift as life evolves—and that's okay. Stay flexible, stay focused, and trust that each step you take brings you closer to the future you're saving for.
Invest for all your savings goals
1Your account may be subject to various restrictions to reduce the risk of fraud. Your transactions may be subject to a 7-day holding period as well as daily transaction limits. Generally, new accounts will be subject to a 60-day holding period for cash and check deposits. During this time, you can invest with this cash, but cash deposits into your account may only be returned to the bank account from which the cash was withdrawn. After the holding period is complete, your funds will be fully available to transfer or withdraw.
2The Cash Plus bank sweep program annual percentage yield (APY) will vary and may change at any time.
3Some third-party institutions may not accept the Cash Plus Account routing number for transactions. If you have any issues using the routing number on a third-party website, contact the provider.
4Bank Sweep program balances are held at one or more Program Banks, earn a variable rate of interest, and are not securities covered by SIPC. They are not cash balances held by Vanguard Brokerage Services (VBS), a division of Vanguard Marketing Corporation (VMC); VMC is not a bank. Bank Sweep deposits are covered by FDIC insurance up to $250,000 per insurable category of ownership at each Program Bank when aggregated with all other deposits held by you at such bank and in the same insurable category. VBS will aggregate and allocate Bank Sweep deposits to Program Banks across Vanguard Cash Plus and Vanguard Cash Deposit with identically registered accounts to offer maximum FDIC coverage up to $1.25 million ($2.5 million for joint accounts) when at least 5 Program Banks are utilized. VBS will aggregate and allocate Bank Sweep deposits for trust accounts at the account level and not at the beneficiary level. FDIC coverage may be decreased based on Program Bank limits and whether you've opted out of any Program Banks and is subject to applicable FDIC coverage limits. You are solely responsible for monitoring the aggregate amount that you have on deposit at each Program Bank in connection with FDIC limits. See the Vanguard Bank Sweep Products Terms of Use (PDF) and list of participating Program Banks (PDF) for more information. For more information about FDIC insurance coverage, please visit fdic.gov.
5Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. State tax treatment of withdrawals used for i) expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school, ii) expenses related to apprenticeship programs after repayments, iii) student loan repayments, or iv) a rollover to a beneficiary's Roth IRA is determined by the state(s) where the taxpayer files state income tax.
6When taking withdrawals from an IRA before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
The Vanguard Cash Plus Account is a brokerage account offered by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC. Under the Sweep Program, Eligible Balances swept to Program Banks are not securities: they are not covered by SIPC, but are eligible for FDIC insurance, subject to applicable limits. Money market funds held in the account are not guaranteed or insured by the FDIC, but are securities eligible for SIPC coverage. See the Vanguard Bank Sweep Products Terms of Use (PDF) and Program Bank list (PDF) for more information.
For more information about any 529 college savings plan, contact the plan provider to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. If you are not a taxpayer of the state offering the plan, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Vanguard Marketing Corporation serves as distributor for some 529 plans.
All investing is subject to risk, including the possible loss of the money you invest. Investments in bonds are subject to interest rate, credit, and inflation risk.